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Our mission is to enable and inspire communication between people by developing communications services that create value and enrich and simplify life.

Telia 2000

Telia AB (publ) Investor Relations SE-123 86 Farsta, Sweden Tel.+46 (0) 8-713 10 00 Fax +46 (0) 8-713 69 47 www.telia.com Corporate Reg.No.556103-4249 Registered Office: Stockholm GLOSSARY

2001 Annual General Meeting Glossary

ADSL: Asymmetrical digital subscriber line, a tech- ISDN: Integrated services digital network, a digital Telia’s Annual General Meeting will be held on Thursday, 10 Nominees provide assistance with the registration, usual- nology that expands the bandwidth on copper- network that provides numerous services for voice, based telephone lines to a maximum 6 Mbps, corre- text, data, and images. May 2001 at 4:00 p.m. at the Globe Arena in Stockholm. ly for a modest fee. sponding to audio and video quality in television today.The bandwidths are different (asymmetrical) LAN: Local area network, a computer network in the different directions (to and from the user). installed on the user’s premises in a limited space. Right to participate in the Annual General Meeting Notice of intention to attend ASP: Application service provider, supplier of soft- MISP: Mobile Internet service provider, a supplier of Shareholders who meet the following criteria are entitled Notice can be given: ware and related services, usually distributed over services via mobile Internet. to attend Telia’s AGM: • by phone: +46 (0) 8-470 81 20 the Internet. NMT: Nordic mobile telephony system, an analog • entered on Telia’s register of shareholders as per Monday, • by mail: Telia AB, Box 999, SE-171 74 Solna, Sweden ATM: Asynchronous transfer mode, a technique mobile telephony system that was developed by 30 April 2001 • on Telia’s website: www.telia.com/agm that allows switched, flexible bandwidth and gives the Nordic public telecommunications utilities. users access to the bandwidth they require for each • and having notified Telia of their intention to attend not particular service. POP: Point of presence, a location where customers later than 4:00 p.m. on Friday, 4 May 2001. In providing such notice, shareholders should state: can connect to the Viking Network. Centrex: Switchboard function in the public teleph- • name ony network. SDH: Synchronous digital hierarchy, a method for Registration procedure • social security/corporate registration number bundling packets of information and transporting Churn: Propensity of customers to change opera- the bundles. The method is based on international Telia’s register of shareholders is maintained by VPC AB. • telephone number tors. standards and increases the capacity in existing fiber-optic networks. Stock may be registered either in the shareholder’s name • number of accompanying persons Churn rate: Customer turnover, that is, the propor- or in the name of a nominee. tion of customers who have switched to competing Server: A computer in the network that stores and operators. processes information for other computers. To attend the meeting, shareholders whose stock has Payment of dividend been registered in the names of nominees must arrange Tuesday, 15 May 2001 is proposed as the record date for CTI: Computer-telephony integration, combination Service provider: Supplier of services, often to the of telephony and computing on terminals and net- end-customer. for their shares to be re-registered in their own names at the right to receive dividends.Dividends are expected to works. VPC not later than Monday, 30 April 2001. be distributed by VPC on Friday, 18 May 2001. SMS: Short message service, a service for transfer- DOF: Department of the Future, Telia’s brand for ring text messages between mobile phones. advanced services, mainly mobile. UMTS: Universal mobile telecommunications sys- Dematerialization: Replacing a physical product tems, the next generation of digital mobile commu- with a network-based service. nications system after GSM.They can handle voice, Financial Information text, data, and images. Financial information GPRS: General packet radio service, a data service for GSM that makes it possible to surf the Internet Unified messaging: A common mailbox on the Annual General Meeting 10 May and send e-mail at transfer rates up to 115 kbps. Internet for voicemail, fax, and e-mail. at www.telia.com Interim Report January–March 10 May Interim Report January–June 16 August GSM: Global System for Mobile Communication, a VNO: Virtual network operator, supplier of services Interim Report January–September 7 November digital mobile telephony system based on a global that are delivered over other operators’ networks. Financial information is available from our homepage standard. GSM 900 works in the 900 MHz fre- Telia’s financial reports are produced by Telia AB, Investor Relations. quency range, GSM 1800 in the 1800 MHz range. VOIP:Voice over Internet protocol, voice communi- www.telia.com, Investor Relations. cation over packet-switched networks, principally Interim reports and annual reports are posted on our HSCDS: High speed circuit digital system, a techni- the Internet. cal solution for mobile data communications that Please direct questions Reports may be ordered via: homepage as soon as they are published and press con- allows the transfer of fax, e-mail, files, and text VPN: Virtual private network, a private corporate regarding content to: ferences are broadcast “live”via the Internet when reports Tel.+46(0)8-7137143 messages with transfer rates up to 64 kbps. network set up in the public network. Telia AB, Investor Relations Fax +46 (0) 8-604 54 72 are presented. Internet: The Internet is a large number of local, WAN: In contrast to a LAN, a wide area network SE-123 86 Farsta, Sweden Online at www.telia.com, independent computer networks that are linked extends beyond the structure of a company via Tel.+46(0)8-7131000 You can also follow Telia’s share price and view all press Investor Relations. using standardized protocols to form a worldwide public or leased lines to other LANs in other build- Fax +46 (0) 8-713 69 47 releases at www.telia.com. network. ings or in other locations. Online at www.telia.com, New shareholders who are registered directly may Investor Relations. Intranet: Private network in a company or other WAP: Wireless application protocol, a protocol that choose to have published reports sent to home addresses. organization that is based on the same protocols as makes it easier for mobile users to access their e- the (public) Internet but is intended for in-house mail and voicemail, send and receive faxes, trade use. stock and do bank errands, and view web pages in small format. Telia’s Operating and Strategic Review for 2000. This is a description of Telia’s IP: Internet protocol, a suite of protocols that helps strategic focus and initiatives during the year for realizing our goals and visions. data networks communicate with one another. Web hosting: A service by which an Internet service Telia’s Annual Report for 2000 is also available, including the report of the provider offers to set up and store customers’ web TELIA 2000 Board of Directors, income statements, balance sheets, performance analyses, pages on computers connected to the Internet and auditors’ report, etc. If the Annual Report is not included in this document, it can owned by the ISP. 49 be ordered by calling +46 (0) 8-713 71 43. 2000 in Brief

The Telia Group demonstrated unabated strong The directory company Eniro was listed on the stock Contents growth in its high-priority areas during 2000. The exchange and some 15 businesses were divested as acquisition of the Norwegian mobile operator Net- part of the Group’s refine and focus strategy. Telia Our Mission 2 Com ASA and the strong sales growth in the mobile signed a Letter of Intent in February 2001 for the From the CEO 4 business in Sweden, Norway, Denmark and Finland sale of the Brazilian mobile operator Tess to Telecom Telia Stock 6 bolstered Telia’s already strong position on the Americas. Focus, Strategies, and Goals 8 Nordic market. A Letter of Intent was signed during Consolidated operating income increased during the year with Tele2 (NetCom AB) concerning joint the year from MSEK 5,946 to MSEK 12,006, including Telia’s Core Businesses construction of the Swedish UMTS network. capital gains and other non-recurring items totaling Mobile Services 10 Despite deep price cuts and stiffer competition, MSEK 8,338. Fixed Services 14 profitability improved in the company’s traditional Investments rose to MSEK 47,742, chiefly due to Portals 18 business, fixed services in Sweden. Price reductions the acquisition of NetCom ASA and the expansion of during the year inhibited the Group’s total net sales, the international carrier network. Telia Research 22 which increased by 4.5 percent for comparable units. During the year, the Group sharpened its focus on The international carrier network, the Viking Net- its core businesses and high-priority target areas.The Telia’s Business Areas work, was further expanded during the year. Com- Group also stepped up its rate of divestment of non- Organization 24 petitive prices and the high quality of the network core business. A new Group structure, including five Mobile 26 resulted in sharp increases in traffic volumes. new business areas, is being introduced on 1 April Carrier & Networks 30 Telia is now investing heavily in the future expan- 2001 in order to strengthen this focus and to pro- Business Solutions 34 sion of mobile communications, broadband, inter- mote internationalization while laying the ground People Solutions 38 national carrier business and portals, which has for Telia to participate in the restructuring of the Enterprises 42 affected earnings for 2000. During the year, under- industry. lying EBITDA totaled MSEK 13,087. Board of Directors 44 Group Executive Management 46 How to Reach Telia 48 Glossary 49 Review of the Telia Group Earnings Share of Group Sales per Business Area SEK million 2000 1999 Net sales 54,064 52,121 Underlying EBITDA 13,087 14,059 Mobile Underlying EBITDA margin (%) 24.2 27.0 Carrier & Networks Operating income 12,006 5,946 Business Solutions Income after financial items 11,717 5,980 People Solutions Net income 10,278 4,222 Enterprises Earnings per share (SEK) 3.50 1.48

Return on equity (%) 23.9 14.2 Investments 47,742 12,145 Share of Group Earnings*) per Business Area of which shares and participations 8,269 4,109 Number of employees 29,868 30,643

Mobile Carrier & Networks Business Solutions People Solutions Enterprises

* Underlying EBITDA TELIA 2000

1 2 TELIA 2000 OUR MISSION reduced impactontheenvironment. andtechnology.based onleadingexpertise solutions communications innovative through – success straints. their own individual needs and without technological on con- based part take to able be will Everyone individuals. tion are a natural part of every business and the lives of all liberating peopleinlife andbusiness. life, simplify and enrich and value create that services communication between inspire people. and enable to is mission Our u sces lo otiue t a ihr oit and society richer a to contributes also success Our achieve and – development this to contributeWe will communica- of forms all where society Wea envision communications develop to is concept business Our OUR MISSION 3 TELIA 2000 FROM THE CEO

“Fine-tuning our operations will free up the resources that can be used to enhance Telia’s core business”

Telia’s President, Marianne Nivert, says that she is satisfied with Telia’s performance during the year. It has been particularly pleasing to see the robust growth in Telia’s current focus areas and the improved profitability of the established business operations.

Are you satisfied with what Telia has achieved How detrimental was it that Telia was not awarded its own during the year? UMTS license in Sweden? “Yes, I am satisfied with what we have achieved. We made sub- “It was, of course, a serious blow for Telia not to receive a UMTS stantial structural changes during the year, which means that we license since offering third generation mobile services across the are concentrating more on our core businesses and our high-prior- entire Nordic market is part of our strategy. But now we have ity target areas and divesting operations that are outside Telia’s found a good solution. The agreement with Tele2 means that we actual core business.We have been very successful in these efforts. can build up a UMTS network in Sweden quickly and, not least, “I can now say that we have had very rapid growth and strong cost-effectively.” demand in our high-priority areas, while at the same time we have been successful in fine-tuning our operations. What was less pleasing in 2000? “Other good news is that we have improved profitability in our “I am not entirely satisfied with the sales trend for the Group as a established business – fixed services in Sweden – where we whole. Our goal is to expand at a faster pace.We will do that when strengthened our margins despite significant rate cuts. we have fully implemented our strategy. “The improvement in underlying EBITDA from the third quarter “Our earnings were also weighed down by our shareholdings in was sustained in the fourth quarter, which is also positive.” certain associated companies. At the beginning of 2001, we signed a Letter of Intent for the sale of the mobile operator Tess in Brazil, How has Telia been successful during the year? which will have a positive impact on earnings in 2001. “In mobile services, we completed a strategically important deal, “We were not able to deliver broadband to Swedish households that is the acquisition of the Norwegian mobile fast enough to meet demand. We have now built up an effective operator NetCom ASA. We have also had pow- delivery system that will allow us to satisfy the huge demand for erful organic growth in new mobile cus- broadband.There is enormous potential for growth in broadband.” tomers, and on a market that already has high mobile penetration. These two factors Any comments on the performance of Telia stock? have resulted in a stronger position on the “It was wonderful that the IPO went so well and that Telia attract- Nordic mobile market where our objective ed so many new shareholders. But it is, of course, less positive that is to be the undisputed leading operator. the stock went on to perform as it did. I know that many people “We also expanded our international carrier had different expectations and were disappointed.” network even further in 2000.Today,Telia has the “There was pressure on the telecom sector industry-wide dur- second longest fiber-optic network in Europe and is ing the fall, partly due to the uncertainty surrounding the extent of one of the few operators that can offer telephony, IP traffic, and investments in UMTS.Telia has been valued on par with other Euro- network capacity in its own pan-European infrastructure. Our net- pean telecoms, even though we are not among those who pur- work is of exceptionally high quality and we offer competitive chased expensive UMTS licenses. prices, which resulted in a robust increase in revenues during the “As President and CEO, it is my job to take action and strength- year. I expect that we will see positive effects in the income state- en the company and thereby lay the ground for positive share price ment from the carrier business as early as 2001. development.” “Another success was that we managed to turn a defeat into a victory by signing an agreement with Tele2 (NetCom AB) for coop- eration on developing a UMTS network in Sweden.” TELIA 2000

4 FROM THE CEO

Telia has initiated significant fine-tuning and cutbacks in its operations – what will Telia look like when these are fully implemented? “Telia’s refine and focus strategy means that we will have a company that is nimbler and more focused on core business. We will enable and inspire communication between people – that is our mission and that is what we do best. Fine-tuning our oper- ations will free up the resources that can be used to enhance Telia’s core business.”

Why is Telia introducing a new organization? “The new Group structure, which will be in effect as of 1 April 2001, will make it possible to participate in the ongoing restructuring of the industry while we strengthen our orientation and promote the internationalization of the com- pany.The new organization will also make us more effective on the Swedish market. “The new organization will also promote definition and trans- parency. I want to be able to follow our established business and see how our new business operations develop. And our new organ- ization will facilitate this.”

What will happen next at Telia? “We will carry on working to implement our strategy and our new set goals.We will continue to focus on our core businesses and we will do this within a new Group structure and with strengthened Stockholm, February 2001 management. “Here in Telia’s management, we will carefully monitor the developments and trends within the industry and the world and strive to seize the opportunities that present themselves. “To our shareholders, I would like to conclude by saying that I have a very positive outlook on Telia’s future and that I promise to Marianne Nivert do all I can to develop and strengthen Telia as a modern, profitable TELIA 2000 and successful communications company.” 5 TELIA STOCK

The largest IPO in the Nordic countries

The listing of Telia on the OM Stockholm Exchange last summer was the largest IPO in the Nordic countries to date. Over one million Nordic private investors subscribed to Telia shares. Telia still has a large spread of ownership in the Nordic countries.

In May of 2000, the Swedish government decided to make a pub- ing of Telia after the listing of the company. At the time of the list- lic offering to purchase the Swedish state’s stock in Telia, after ing, private investors held 23 percent of the pre-sold shares, which the state’s holding would total no less than 70 percent of all Swedish institutions and businesses held 41 percent and foreign shares.The decision to issue new shares was also made at this time. investors 36 percent. There was huge demand for Telia shares from both private and Simultaneous with the IPO, a new share issue of 150 million institutional investors and the offering was oversubscribed four shares was also made. The new share issue brought an infusion times. Over one million private investors in the Nordic countries of MSEK 12,429 of new capital to Telia after deducting issue subscribed to shares. Of these investors, 954,000 were Swedish. expenses. On 13 June, Telia’s shares were quoted on the A list of the OM As of 31 December,Swedish institutional investors had increased Stockholm Exchange. The share price was set at SEK 85 through their holdings to 63.5 percent and foreign investors had decreased tender procedures.The Swedish state retained a 70.6 percent hold- their holdings to 15.9 percent.Telia retained 866,000 shareholders.

Share Development

Index* 110

100

90

80

70

60

50 1 July 2000 1 Aug. 2000 1 Sep. 2000 1 Oct. 2000 1 Nov. 2000 1 Dec. 2000 1 Jan. 2001 1 Feb. 2001

Telia Affärsvärlden’s general index Dow Jones Euro Stoxx Fixed Line Communications Index

TELIA 2000 * 13 June 2000=100 6 vrgd SK 1. pr rdn dy n a aeae f nearly of average an and day trading per 710.4 MSEK averaged to 45.1 percent of the total number Share of turnover issued shares. billion shares at a value of GSEK 100.2.The traded shares correspond total turnover the approached OM 1.353 Stockholm Exchange.The The share price fell by 43 percent during the year.was SEK48.5. theclosingprice 29December, On thelasttrading day oftheyear, was on quoted 28 on December.13 SEK June 46.90, and the 94.00, lowest, SEK shares, Teliafor price settlement highest The percent. –40 of decline a showed Index Communications Line Euro Fixed Stoxx Jones Dow The year. the during significant also was sector decline for the telecom percent from 13 June.The decline of –20.6 Exchange. of theOMStockholm market value corresponded to 4.1 percent of the total market value their holdingsto20.6percent oftheshares. reduced now had who investors private were 847,000 these, Of wesi tutr,ExcludingtheSwedish State Ownership Structure, 2001. January 1 of as TredjeFjärdeAP-fonden, and Andra, Första, fourfunds, into up Fjärde AP-fonden Comment: (one of the National Pension Funds) has been split During the year,Telia shares were one of the ten most traded on a indicated Exchange Stockholm OM the forgeneral indexThe At the end of 2000,Telia’s market value totaled GSEK 146.6.The H odr1,0,0 0.4 0.6 0.6 0.7 12,100,000 0.6 0.8 17,200,000 0.8 0.8 1.0 0.8 19,400,000 17,700,000 18,600,000 1.2 1.7 25,200,000 25,200,000 0.9 25,200,000 28,100,000 25,200,000 SHB Fonder AMF Pension 36,700,000 50,800,000 SEB-Trygg Försäkring 26,700,000 SPP Livförsäkring AB AFA Försäkring Fjärde AP-fonden Tredje AP-fonden Andra AP-fonden Första AP-fonden Livförsäkrings ABSkandia SEB Fonder Nordea Fonder Robur Fonder oa ,0,0,0 100.0 3,001,200,000 4.7 0.3 11.0 84.3 142,000,000 10,500,000 327,300,000 2,531,900,000 Total Non-Swedish shareholders Other Swedish shareholders Total 16shareholders Länsförsäkringar 70.6 2,118,200,000 Försäkringsbolaget SPP) Alecta (prev. Swedish state 31December2000 Major Shareholders, Allotment and businesses Swedish institutions Foreign investors Private investors ubro hrs% Number ofshares 31 December2000 510002.5 75,100,000 and businesses Swedish institutions Foreign investors Private investors 15–25 percent ofnetincomefor theyear. 15–25 target is normally per a sharedividend totaling is MSEK 1,501.The 0.30 per share.The total distribution for a total dividend of SEK SEK of 0.50 dividend extra an proposing is Directors of Board the tion, SEK 0.20 per share for 2000 to In the addi- annual general meeting. 9,603,840,000. has a par value of SEK 3.20.The total share capital share amounted Each to SEK vote. one to equal is share Each shares. 3,001,200,000 shares. 200 is lot trading One daily. completed were trades 2,400 Year Summary. Additional per share data is available in Telia’s 2000 Annual Report under Six- 6Jn 00100032 8,0 – – – 480,000 – 3.20 323,840 150,000 3.20 1036.80 – Share capital, 2,842,400 16 June 2000 settlement date New share issue, 20 May 2000 324:1 split, 20 May 2000 Bonus issue, 1999 and 31Dec. 1998 31 Dec. Share capital, oa ,0,0,0 0. 6,8 100.0 <0.1 865,985 0.1 105 <0.1 0.9 1.9 100.0 97.0 937 269 3,001,200,000 7,999 16,377 840,298 % 89.7 Numberof 2,691,922,770 Changes inShare Capital 5.3 0.9 0.4 3.0 0.7 shareholders % 157,693,233 28,331,812 12,752,823 88,479,131 22,020,231 Total ofshares Total no. 1,000,001– 100,001–1,000,000 10,001–100,000 1,001–10,000 501–1,000 1–500 of shares Number 31December2000 Shareholder Structure, 1Dc 2000 31 Dec. The Board of Directors has decided to recommend a dividend of in shares of wasThenumber 2000 TeliaDecember 31 of as AB ,0,0 .0963802,932,757,377 9,603,840 3.20 3,001,200 fsae Prvlecptl number capital Par value of shares ubr Sae Average Share Number ’0)SKsaeSK(00 ofshares SEK(’000) SEK/share (’000) ,0 000 ,0,0 2,851,200,000 8,800,000 1000.00 8,800 TELIA STOCK 7 7 TELIA 2000 FOCUS, STRATEGIES, AND GOALS

Expand in growth areas and streamline existing operations

To secure the Group’s long-term growth and competitive strength, Telia is completing three initiatives in its core businesses: developing broadband for Swedish households, establishing an international carrier business, and focusing on mobile communications with an emphasis on the Nordic market.

The telecommunications industry has undergone huge changes ing the year based on the principle of divesting all operations that within a very brief period. From being a strictly regulated industry are without industrial synergies and that are outside the Group’s of powerful monopolies and nationally anchored players, it has strategic core. transformed itself in recent years into a complex industry of inten- Telia has three major core businesses: fixed services, mobile ser- sive investment, with significant business logic capability and a vices and portals. Alongside the three core businesses is a fourth growing number of specialized players active at a regional or glob- business, Telia Equity, which consists of financial investments, al level. including participating interests that Telia has decided to retain in Several forces, often working together, have driven the devel- divested companies. opment and changed the structure of the industry. The deregula- tion and liberalization that began in the 1980s, in combination with One of the big players on the carrier market new, less investment-heavy technologies, have made it possible for Two more pioneering initiatives were implemented within the new players to establish themselves on the telecom market while fixed services core business: the development of an international established operators have been allowed access to compete on network platform for the global carrier market and the develop- each others’ home markets. ment of broadband for Swedish households. The Internet, which exploded onto the scene in the mid-1990s, The burgeoning number of players in the market and the has been a huge force. IP (Internet Protocol) has quickly become a expansion of the Internet and other IP-based services are gener- globally accepted standard for linking computer networks world- ating demand on networks that transport IP traffic on a global wide with capacity for interactive multimedia communications level. Historically, one of Telia’s strengths has been its ability to based on voice, text, data and video. apply new technologies to develop infrastructure and basic sys- Together with web technology, IP has practically revolutionized tems for application on a broader scale. Telia was also one of the not only the telecommunications industry, but other related indus- first operators in Europe to establish itself as a transporter of IP tries as well, such as data, IT and media. IP is being used to create traffic over the Atlantic. a common technical platform for a growing number of industries. In order to be able to develop a strong position on the carrier The resulting convergence of industries is laying the ground for the market for IP-based traffic, Telia decided to operate its own net- development of entirely new types of services. work platform in Europe and the United States.The increasing vol- umes of information transported across networks are placing Economies of scale and synergies greater demands on quality and security. Prices are declining as Intensifying competition is driving the creation of new services access to capacity increases.This means that carriers that aspire to at an ever faster rate, while putting pressure on prices. This trend be successful must be able to offer high quality at attractive prices is increasing the need for streamlining in order to sustain margins for their services, something that is only possible for those who and for concentrating resources to core business in order to main- have control over networks. tain competitive strength in a market of increasingly short prod- Telia’s goal is to be one of the three major network wholesalers uct life cycles. in Europe and to own one of the five major IP networks in Europe As competition intensifies, companies need to seek out syner- and the United States. gies and economies of scale. We expect to see a consolidation of the most expansive growth areas in coming years. Steer broadband for Swedish households Sweden has the highest IT maturity of any country in the world, Three core businesses according to studies done by IDC/World Times, and Telia has been

TELIA 2000 Telia was early in cutting operations that lacked strategic signifi- an important contributor to this development. One important 8 cance. Further structural changes and decisions were made dur- parameter for assessing a country’s IT maturity is the proportion of FOCUS, STRATEGIES, AND GOALS

Strategic Focus – Core Businesses

Mobile Services Fixed Services Portals Equity

Secure Telia’s position as the leading Establish Telia on the international Develop a multi-portal on the Retain Telia’s participation in mobile operator in the Nordic carrier market. Lead broadband Swedish consumer market with a divested companies in order to grow countries. Establish a position at the development on the Swedish growing range of broadband value that can be crystallized in the forefront of mobile Internet services consumer market. services. Launch mobile operator- short or medium term. in Europe. independent portals in Europe. home computers and home Internet access. Sweden is at the top is to establish operator-independent mobile portals in order to of the 55 countries ranked. attain a position in mobile Internet services. This high Internet and computer penetration provides a good foundation for a rapid implementation of broadband in Swedish Ensure profitability in existing operations households. Telia’s ambition is to steer the development of broad- Telia’s current initiatives in mobile communications, broadband band on the Swedish consumer market by offering access at rea- and international carrier operations are aimed at ensuring the sonable prices and developing attractive services that create incen- Group’s long-term growth and competitive strength and at creat- tives for households to move to the world of broadband. ing profitability and shareholder value at least on par with the most successful telecoms. The leading mobile operator in the Nordic countries The established business, fixed services in Sweden, continues to Another robust growth area is mobile services. Throughout the represent the greater part of the Group’s sales and earnings. Initia- history of mobile telephony, Telia has been among the world’s tives and investments made for future growth are largely financed leading companies and been involved in driving developments. by the surplus generated by the established operations. In order to Mobile communications are in a powerful stage of development ensure profitability, Telia continuously streamlines its operations. with technological shifts and new regulatory policies. During the year, the marketing channels and delivery process were Telia already has a very strong position on the Nordic mobile revamped in order to reduce Telia’s costs while at the same time telephony market, which is one of the most developed in the world improving customer access to Telia. with users who show broad acceptance for trying new services and Telecommunications provide an environmentally friendly means new technologies.Telia’s goal is to be the undisputed leading mobile of communication.Telia has an ongoing dialog with representatives operator in the Nordic countries, in terms of sales as well as cus- from trade and industry as well as the public aimed at inspiring tomer base and expertise. In coming years, Telia intends to further people to view telecommunications as an opportunity for creating strengthen its position in the Nordic countries by developing cut- sustainable development. ting edge services and utilizing economies of scale and synergies created by the growing customer base. Sweden, the country with the highest IT maturity Outside the Nordic countries, the ambition is to take a leading position on the chosen European markets in mobile Internet by 6,000 taking advantage of the new regulatory conditions that allow com- panies to offer services to end-customers without building and 5,000 operating their own networks. 4,000 Beyond this, Telia will develop new innovative wireless services for machine-to-machine communications, M2M, which is an area 3,000 with enormous potential. 2,000

Portals – a platform for new services 1,000 Telia’s third core business is portals.Telia was quick to realize early 0 on the importance of developing portals as platforms for intro- ducing new types of content services. With portals, Telia can Japan SwedenNorwayFinland Canada Austria utilize and strengthen its position in fixed and mobile Internet Denmark AustraliaSingapore Germany Switzerland Hong Kong United States services. Portals are very important tools for cementing cus- United Kingdom The Netherlands tomer relationships. IDC/World Times regularly measures the IT maturity of different countries based The main focus of Telia’s portal operations is to create a multi- on a total of 23 parameters, including the proportion of home computers and portal for the Swedish consumer market along with a growing home Internet access. Sweden was once again at the top of the list in the latest TELIA 2000 range of broadband services.On the international market, the focus measurement, while the United States slipped down from second to fourth place. 9 Mobile Services

Wireless broadband on the move

“We will also develop new cross-border services with real customer value,” says Terje Christoffersen.“The needs are obvi- ous. Anyone who has traveled abroad and experienced difficulties retrieving mes- sages on their mobile phones or PCs knows what they are.” The pan-Nordic subscription will allow Telia to combine various functions in its network in order to offer services such as retrieving e-mail on a mobile phone and forwarding selected calls The integration of the abroad. Positioning information makes it possible to Nordic market is continu- steer incoming calls to the user’s physical location and to ously evolving. Many Nordic receive information from local sources, such as the airline of companies have operations in an upcoming flight in order to check details of departures, gate the other Nordic countries, while other numbers, delays, etc. companies are looking to form alliances and “In order for this to work, the information must be customized to my personal collaborate across borders. A growing number of compa- needs – and the services must follow me wherever I go,” explains Terje Christoffersen. nies view the Nordic countries, as their home market, which drives the demand for “Until now, mobile telephony has mostly been mobile voice, but today there communications services that are functional, simple and effective across the entire are more and more mobile data communications options. A huge part of corpo- Nordic region. rate work processes are based on data communications.The solutions used by one Telia is the only mobile operator with its own mobile network and services in company are often completely different in different countries.The technical infra- Sweden, Norway, Denmark and Finland. The acquisition of NetCom ASA in Nor- structure must be integrated to make mobile data communications work across way has bolstered Telia’s competitive advantage. national boundaries.” “Now Telia has a unique business opportunity to quickly create a pan-Nordic Pan-Nordic services are only the first step,of course.Pan-global is the obvious goal. services offer and an ‘intra-Nordic’ communications market,” explains Terje The Mobile business area already offers a service that works the same way all Christoffersen, President of NetCom ASA. “I look forward to seeing the potential over the world. HomeRun is a wireless broadband connection that allows travel- synergies inherent in our pan-Nordic presence being realized on the customer side. ers with Telia subscriptions to connect their portable computers to their compa- Our first step is to address our prices. It is a paradox that while mobile telephony nies’ Intranets. This is a powerful service with transfer speeds up to 11 Mbps. promotes globalization, the price structure for mobile services is local.” HomeRun is already available at some 80 hotels in Sweden and at Arlanda air- For companies with operations and employees in several countries wishing to port. During the year,Telia signed an agreement with SAS to install the HomeRun TELIA 2000 simplify their administration and subscription management,Telia is offering a pan- service in all of the airline’s international lounges. 10 Nordic subscription with one rate from all Nordic countries in 2001. MOBILE SERVICES

Leading role in the development of the mobile information society

The market for mobile services continues to demonstrate powerful growth. Technological develop- ments are making it possible to create totally new types of services. Telia’s large customer base is a strong platform for launching new services and generates significant economies of scale.

Telia is the leading mobile operator in the Nordic countries, in terms Telia is also conducting extensive business development in mobile of both customer numbers, market share and sales. The company services, primarily within its New Business unit, which includes has a strong position in the Baltic region as well, through participa- several start-ups and developing operations and companies. New tion in several mobile operators in the Baltic states and northwest- Business works as a venture capital company aimed at creating ern Russia.Through its partial ownership of the investment compa- shareholder value for Telia. ny Telia Overseas,Telia has also made several financial investments The operations in New Business during the in mobile operators in growth regions, primarily outside of Europe. year included Telia GlobalCast Internetwork- Telia is also among the leaders in mobile Internet, partly due to ing AB (owns and manages networks for high its early launch of mobile portals, the WAP portal MyDOF in Swe- speed mobile data transfer), Wireless Main- den and the operator-independent Speedy Tomato portal, which gate AB (develops mobile communications was test-launched in the U.K. and Denmark in 2000.Telia also has a solutions for M2M applications),WirelessCar market presence via the Halebop portal jointly owned with Oracle. AB (develops mobile communications prod- Telia is the only full-service operator in the Nordic countries ucts and services for the automotive industry), with its own mobile network and services in Sweden, Norway, Den- Svenska Drutt AB (manages the Halebop portal), mark and Finland.The strong presence on the Nordic market com- Telia Bright (offers mobile IP telephony to business cus- bined with the largest customer base in the Nordic region gives tomers) and various projects such as HomeRun (wireless broad- Telia unique opportunities to create value using today’s voice- band access and services to sites such as airports, railway stations, based telephony while securing the transition to increasingly data- hotels and conference facilities). based wireless communication.Telia’s strong Nordic presence also Telia’s strong brand is also an important competitive advantage, entails opportunities for offering unique pan-Nordic services. both in the marketplace and for attracting partners. Various part- nerships have been established with global leaders such as Oracle “Our customer base of The strongest customer base in and Olivetti, which shows Telia’s strong attractiveness as a partner. 4.8 million customers the Nordic and Baltic regions in the Nordic and Baltic Telia has 4.8 million mobile customers A totally new market for mobile services regions gives Telia significant economies in the Nordic and Baltic countries and The market for mobile services continues to grow at an extremely of scale, particularly northwestern Russia. This large cus- fast pace. There are many technological breakthroughs on the regarding the develop- tomer base is a very strong platform horizon, including the transition from narrowband telephony net- ment of new types of mobile services.” for launching new mobile services works to broadband data com- and provides significant economies of munications. Different technical “The ongoing convergence scale, especially for the development of new types of services for platforms will be integrated and between the telecom, media, entertainment, retail and securing Telia’s leading position in wireless communications in the customers will have access to a financial services industries Nordic countries and mobile Internet in Europe. Our large customer variety of services from different is likely to take place rela- base is also a valuable asset for attracting strategic partners. networks without technical limi- tively quickly in the Nordic tations. Technological develop- countries. This means that the market is growing and Extensive development efforts ments are making it possible to that the value chain is Telia not only has a broad range of mobile services with expertise create totally new types of expanding and making room in wireless broadband access and wireless local networks (LAN), mobile services. for new roles and players.” but is also on the cutting-edge of development of completely new The Nordic mobile market is types of services for machine-to-machine (M2M) communications one of the most developed and innovative in the world, with signifi- TELIA 2000 and mobile electronic commerce (m-commerce). cant user readiness to try new applications.The ongoing convergence 11 MOBILE SERVICES

between telecom, media, entertainment, retail and financial serv- fallen in recent years, which in turn has generated strong growth in ices is therefore likely to take place relatively quickly in the Nordic the volume of both customers and traffic. Telia expects that tradi- countries.This means that the market is growing and that the value tional voice traffic will continue to grow as mobile phones increas- chain is expanding and making room for new roles and players. ingly replace fixed telephony, and that rates for traditional mobile The new scenario is opening up totally new business opportu- services will continue to fall. However, more sophisticated and easy nities and increasing the total value of the mobile market. The to use services will lead to bounding growth in data traffic over the developments will require a high quality infrastructure, good cov- mobile network. erage and availability for a large part of the public, however. If this The share of data traffic will increase as access to better termi- can be secured, the market for wireless communications will be nals expands in combination with the breakthrough of the new able to expand rapidly in coming years. Telia is very well prepared broadband technologies, GPRS and UMTS. The UMTS network will for this scenario. play a significant part, but Telia is also developing several new serv- Since expansion in terms of customer number is limited – ices by upgrading the existing GSM network with high speed tech- mobile penetration is very high in the Nordic countries – a large nology, HSCSD, and packet-switching technology, GPRS. part of the growth will be in value. Telia will seek growth in value The Nordic market is among the most deregulated and com- through a growing range of new services and increased demand petitive in the world. The mobile networks have been opened for due to declining price levels.This is also necessary for quick migra- service providers that lease out network capacity for services to tion from fixed to mobile telephony. end-customers. Telia already has agreements in place with service The price level for mobile services in the Nordic countries has providers in Sweden and Norway.

Mobile Telephony Churn, Mobile Telephony Customers, SMS Development in the Nordic Sweden (%) Nordic Countries (‘000) Countries (millions of messages)

4,000

12

450 3,000

9

300 2,000 6

150 1,000 3

0 0 0

1998 1999 2000 1998 1999 2000 Q1 Q2 Q3 Q4

Sweden Norway Sweden Norway Denmark Finland Denmark Finland

Share of the Total Number of Customers on the Mobile Penetration, International Comparison, Nordic Mobile Telephony Market Including Prepaid Cards (%)

75

27% 51%

50

Sweden Norway

25 8% 4%

0 Denmark Finland

Italy Spain France Iceland FinlandNorway AustriaSweden Ireland Denmark Germany Belgium LuxembourgSwitzerland United States TELIA 2000 September 2000 The NetherlandsUnited Kingdom Source: EMC 12 MOBILE SERVICES

Overall goals and strategic focus The mobile business is the primary value-driver and part of the foundation of Telia’s comprehensive growth strategy. Telia will continue to play a leading role in the development of the mobile information society. We actively seek to identify and utilize economies of scale across the entire mobile Finland Telia Finland 100% area in order to promote cost-effectiveness and prof- 149,000 customers itability. Our goal is to show a profit on a par with the Norway best in the industry. NetCom ASA 100% Russia The main goal is for Telia to be the leading sup- 850,000 customers North West GSM 12.7% +9.5% through Telecominvest plier of wireless communications in the Nordic Sweden 253,000 customers and Baltic region. On the Nordic market,Telia is to Telia Mobile 100% be a full-service opera- 3,257,000 customers “Telia is well tor, which means man- Estonia positioned for the aging networks as well technological shift Eesti Mobiiltelefon 24.5% in mobile commu- as offering services for 327,000 customers nications and plans broad target groups, con- Latvia to offer GPRS and sumers and businesses. UMTS services Latvijas Mobilais Telefons 24.5% 270,000 customers throughout the Our ambition is to estab- Nordic market.” lish GPRS and UMTS across Denmark Lithuania the entire Nordic market. Telia Danmark 100% Omnitel 27.5% Mobile Internet is a general term for Telia’s mobile 297,000 customers 309,000 customers portal initiatives. As the market for mobile Internet becomes more defined, our customer offers have gained importance. Telia’s goal is to be the leader in mobile Internet in the Nordic countries in terms of customer base, development of advanced services and use of new technology. Elsewhere in Europe, where Telia does not intend to build and operate its own networks, Telia’s objective is to work in partnership with investors and con- tent providers to establish itself as one of the five major owners of 4.8 million mobile customers in the mobile portals by acting as a mobile virtual network operator Nordic and Baltic regions (MVNO). In the Baltic region (the Baltic countries and northwestern Rus- Today, Telia has a very large customer base in the Nordic and Baltic regions. The sia), Telia is a partner in mobile operators and intends to increase number of mobile customers at year-end totaled 4.8 million including Telia’s share its involvement in the companies. of operator companies in the Baltic states and Russia. The development of services is gaining importance as more and more players are establishing themselves on the market as opera- tors with their own networks or as virtual network operators launching services to end-customers over other operators’ net- works.This growing competition makes great demands on product PTS (Swedish National Post and Telecom Agency), the government and services development and the ability to offer new value added agency that grants licenses, announced at the end of the year that services both to customers and operators. Telia intends to offer a Telia had not been granted a license due to a lack of technical fea- competitive range of broad and innovative services for consumers sibility. Telia does not find any lack of technical feasibility and has and businesses and to introduce new technologies early in order to appealed the decision on 8 January 2001 and intends to take legal stay on the cutting edge of the development of new types of action against PTS in order to obtain a license. mobile services. In order to quickly gain access to a UMTS license,Telia has signed a Letter of Intent with the Kinnevik company Tele2 (NetCom AB) GPRS and UMTS to collaborate on the expansion of third generation UMTS mobile The expansion of GPRS is already underway and Telia expects to networks. Tele2 (NetCom) and Telia intend to establish a network offer GPRS services in all the Nordic countries in 2001. GPRS is the company as a 50:50 venture. The jointly owned company will uti- first step towards third generation mobile networks and is based on lize Tele2’s (NetCom’s) UMTS license. packet-switched technology in contrast to circuit-switching in This deal will make it possible for both companies to build and today’s GSM. operate a cost-effective UMTS network in Sweden. Telia and Tele2 The UMTS licenses for third generation mobile communications (NetCom) are working together on building and managing the net- are an important part of Telia’s strategy in mobile communications. work, but will later compete on the end-customer market for their Telia was awarded a UMTS license in Finland as early as 1999, fol- company-specific services. lowed by a UMTS license in Norway in 2000 via NetCom ASA. The Danish regulatory authority will grant UMTS licenses in TELIA 2000 Telia applied for a UMTS license in Sweden during 2000 as well. Denmark by auction in 2001. 13 Fixed Services

Malmö – the longest bridge, the tallest building, and now even the broadest network

the area, with Skanova as a wholesaler. Customers go to their local Telia shop to sign contracts and obtain equipment. Construction on the network will be com- pleted by May/June and will include 30,000 outlets, primarily households. Residents pay SEK 200 per month for access to the regional network and the Internet. “In addition to the basic service – a fixed, high speed connection in the local broadband network with Internet access – residents also gain access to many new services,” says Peter Johnsson of HSB Malmö. The Malmö region is full of “These services include everything from everyday functions activity. One exciting venture is such as information about common areas and alarm systems to the world’s largest broadband local video on demand, education and IP telephony.We conducted surveys area network (LAN) currently under con- to find out which services are of interest to HSB residents. Security services struction in Malmö and the surrounding area, being and education were among the most popular preferences.” built by Skanova for HSB. The network is concentrated in Malmö, but extends “An open local area network has enormous advantages,” says Skarsgård. throughout the region as far as Trelleborg. What makes it “local” is the fact that “Most relationships and communications, both personal and business, are local. users can communicate in the network without having to go via the Internet. In most cases, there is no need to go the long way around over the Internet.Tasks “This is unique,” explains Torbjörn Skarsgård of Skanova.“Not only because of such as sending a video to a neighbor can be done much more quickly in the its size, but also the fact that it is an open, public broadband network without con- regional network.” straints.” Initially about 25 percent of the households have subscribed for connections, Despite the fact that HSB Sverige has a general agreement with a competitor, but in some cooperatives as much as 70 percent have already obtained subscrip- HSB Malmö chose Telia as its regional supplier. tions. One subscriber already using the network is Uno Esbjörnsson, 76: “Here is a customer that understands the concept of open networks, without “I collect stamps and the network is a great way to see what is available in dif- any binding portal as a gatekeeper,” says Skarsgård. ferent countries.Today I also looked at some motor homes. Not for right now, but The technical structure is based on high speed fiber-optics (1,000 Mbps Eth- maybe someday…” ernet) and LAN-based customer premises networks (10/100 Mbps). The residen- “Besides making the world of broadband available to HSB residents, this also tial areas with ADSL are also connected to the regional “Gigabit network.” allows the building cooperatives to use the network, for example for automated TELIA 2000 HSB Malmö’s contracting party is Telia Partner and Skanova is building the net- services such as monitoring heating systems,” explains Johnsson.“This is an excit- 14 work and delivering equipment. HSB Malmö acts as a reseller to the residents in ing new role for us as a service provider.” FIXED SERVICES

Broadband for Swedish households and a strong position on the carrier market

Telia has a strong position in fixed networks with a well-developed infrastructure and a wide range of services. Telia is working on two major strategic initiatives for enhancing the fixed services core business: developing broadband for Swedish households and establishing Telia on the international carrier market.

Telia has an extensive infrastructure of fixed networks and a wide holds and the other major initiative is developing Telia as one of the range of services, both basic and premium services. Telia is also major network wholesalers on the international carrier market. active in fixed networks in both retail and wholesale. On the retail market, Telia has its main focus in Sweden, along Broadband services for households with operations in Denmark and Finland as challengers with a lim- Sweden is the country that, along with Denmark, is considered to ited range of services. Beyond this, Telia is also a partner in fixed be the best prepared for rapid large-scale implementation of broad- network operators in Poland and the Baltic countries. band on the consumer market. This is chiefly due The network wholesaling operations are concentrated in Swe- to the high level of IT maturity in the two den, Europe, and the United States. countries, together with a high proportion Despite advanced competition,Telia retains a strong position on of PCs and home Internet access. the retail market in Sweden in the major product segments: fixed The broadband initiative currently telephony, data communications and Internet access. This applies being implemented is aimed at devel- to both the business and private consumer markets.Telia is also the oping access solutions for households largest supplier of broadband and IP-based services in Sweden. at affordable prices as well as offering Telia has slashed its prices on the Swedish end-customer market attractive services, both content ser- in recent years. Since these rate cuts, Telia’s offerings have become vices and communications services, that very competitive and the company expects the price structure will encourage customers to migrate from nar- now be stabilized. rowband to broadband. A growing proportion of voice communication is now gradual- Telia offers different types of broadband access to ly moving from the fixed access networks to mobile networks. households: ADSL, a combination of fiber and LAN (local network), However, at the same time, the use of PC-based services such as e- and a combination of LAN and ADSL. ADSL is a cost-effective mail and the Internet is rising, with a subsequent increase across broadband technology that makes it possible to upgrade the exist- the total market for communications based on fixed networks. ing copper-based telephone lines closest to the customer to speeds Demand is also growing on the wholesaling market, in Sweden up to 6 Mbps, corresponding to today’s television-quality, audio as well as abroad. Deregulation has led to a large number of new and video. players establishing operations on the market. Many of these play- ADSL makes it technically possible to deliver broadband to all ers lack their own networks or have only partial networks.This gives households within a radius of four kilometers from a telephone Telia the opportunity to deliver network services as a wholesaler, exchange, which is approximately 90 percent of Swedish house- everything from leased lines to more sophisticated services, in holds. In 2000,Telia constructed an automated delivery system for Sweden and internationally. ADSL. At present (February 2001) approximately 700 of Sweden’s Telia’s Swedish operations in both wholesaling and retailing 7,200 telephone exchanges are equipped for ADSL. mean that the reduced revenues on the retail market due to Demand for broadband is very strong. As of year-end, the gen- increased competition are partially compensated by higher eral agreements Telia closed with rental property owners, building wholesale sales. The fixed network operations in Sweden, serv- cooperatives and homeowners represented potential connection ices and infrastructure, are a profitable business for Telia and of 822,000 households to the fixed network. accounted for approximately 50 percent of the Group’s total rev- During the year, Telia initiated the development of broadband enues in 2000. services for the retail market in Sweden.The first broadband services, In order to develop the fixed services core business, Telia cur- mainly in entertainment and leisure, were launched on www.start- rently has two major strategic initiatives underway. One is devel- sidan.telia.se, which is the basis for the multi-portal for the retail TELIA 2000 oping broadband access and broadband services for Swedish house- market which is to launch at the end of the first quarter of 2001. 15 FIXED SERVICES

Integrated services for business customers based PBX), also reduces the impact on the environment by mak- Most of the larger business customers already have some form of ing hardware, diskettes and packaging obsolete. broadband communications.The focus for business customers is to In order to be able to develop network-based services for both offer solutions that integrate voice and data, fixed and mobile on a household and business customers,Telia has initiated collaboration shared IP-based platform. with several strategic partners. Another high-priority initiative for the business market is the development of services and applications that customers can lease Network wholesaling in Sweden over the Internet, paying only for the time that the service is actu- In order to be able to satisfy the anticipated large demand for ally used. Demand for these kinds of services is expected to grow broadband services,Telia is currently augmenting its capacity in the as companies begin working in earnest in business-to-business net- nationwide fiber-optic transport network in Sweden while upgrad- works. ing the logical networks. As networks and applications grow more complex, business cus- The main focus is on shifting from circuit-switched networks to tomers have greater need for outsourcing parts or all of their IT and packet oriented networks. Telia is now rapidly constructing a communications systems. Telia is expanding its resources and national IP-based network integrated with the international Viking expertise in order to be able to offer business customers the oppor- Network. tunity to outsource their IT-based communications systems. Telia today has a very strong position on the Swedish network Developing services that are distributed over or integrated in wholesaling market with by far the best network coverage and the the network, for example Games on Demand,Video on Demand or largest range of services. In order to cement our position even more other types of dematerialized services such as Centrex (network- strongly, Telia is currently developing a number of new network

The Viking Network – Telia’s global IP platform

Telia has established an international fiber-optic carrier network within a short period of time. In 1999,Telia began an aggressive initiative to construct its own pan-European infrastructure. By swapping infra- structure with other operators, Telia has also gained access to a fiber-optic network in the United States. The American and European parts of the Viking Network are integrated via the Atlantic TAT-14 cable. The Viking Network has six major interlinked connection points – five in Europe and one in New York.Telia has set up data centers at these points where large, global content providers with high demands on secu- Seattle rity and capacity can store their servers and connect to the network. The Viking Network, built to carry high volume IP- Boston Chicago New York based traffic, is monitored from opera- Denver Manasquan tions centers in Stockholm, Jön- Tuckerton San Francisco Washington, D.C. köping and Washington DC. Los Angeles Dallas Atlanta Oslo mi Stockholm

Miami Gothenburg Riga Nørre Nebel Copenhagen Kaliningrad Vilnius Gdansk Dublin Hamburg Lowestoft Amsterdam Berlin Hannover Warsaw Leipzig Bristol London Düsseldorf Dresden Southampton Wroclaw Bude Ruckinge Brussels Cologne Prague Frankfurt Nürnberg Krakow Paris Strasbourg Stuttgart Vienna Bratislava Munich Basel Budapest Zürich Geneva Lyon Venice Bordeaux Milan

La Coruña Bilbao Marseille Zaragoza Porto Barcelona Madrid Lisbon Valencia

TELIA 2000 Existing networks and networks under construction. 16 Planned expansion 2001/2002. FIXED SERVICES

The Swedish Business Market

60% 75% 35% 70%

Share of Data Communications Share of Fixed Telephony Share of ISP Market (value) Share of Market for Large PBX Market (value) Market (value) Systems (value)

Swedish Private Consumer Market

50% <10% 80% 35%

Share of Market for Small PBXs Share of Market for Service Share of Fixed Telephony Share of ISP Market (value) (value) on IT Systems (value) Market (value)

services for the external market. At the end of the first quarter of The Viking Network is being established cost-effectively. Telia 2001, Telia will be the first Swedish operator to offer IP telephony invests in surplus capacity that can be sold or used for swaps with to broadband providers who connect their customers via LAN. other owners of infrastructure. Through swapping deals, Telia has gained access to a coast-to-coast fiber-optic network in the Unit- International carrier operations ed States covering eleven of the largest metropolitan areas. Deregulation is also generating demand on network capacity and At year-end, the Viking Network extended over 13,000 kilome- network services on the global market. The growing use of the ters in Europe and 18,000 kilometers in the United States.The var- Internet and broadband services also makes demands on networks’ ious routes began to be lit up in 2000. abilities to carry voice, text, data and video securely and at high The greater part of the traffic currently consists of telephony, speeds. but Telia expects that transport of IP traffic and leasing IP capacity In order to be able to take a position on the international carri- will be the dominant products in the future. Demand for IP traffic er market,Telia has begun establishing an international carrier net- tripled during the year 2000. work, the Viking Network. This network, mainly concentrated in The goal is for Telia to be one of the three major network whole- Europe and the United States, makes Telia well positioned for join- salers in Europe and to own one of the five major IP-based net- ing the leading carriers of transatlantic IP traffic, where the major works in the United States and Europe. streams of Internet traffic are carried. TELIA 2000

17 Portals

Speedy Tomato – because every day can be special

can use technology. Our customers can use an ordinary mobile or WAP phone, a PDA device or other mobile terminals – it’s the services that are important. We have only started, and are now working intensely on developing new services – services based on two-way communication with our users.” Speedy Tomato AB was established in Septem- ber 2000 and is a wholly owned subsidiary of Telia.The portal was test-launched during the year in the U.K. and Denmark and introduced in Finland in February 2001. It will be launched in several other Euro- pean countries during 2001. Blend 2 cl vodka, 3 cl gin, 2 cl Speedy Tomato is operator-independent and Telia plans to offer Poire au Cognac (pear liqueur) in a services on this portal for the European consumer market without glass, fill up with lemon soda and top with building and operating its own networks. The expansion outside of the a cherry tomato. That’s a Speedy Tomato! Nordic countries will be achieved through joint ventures with local partners. Our This recipe is found at Speedy Tomato’s homepage, along with other tomato- goal is to be one of the five largest portals in Europe, which means that Speedy based drinks and food recipes. Tomato will build a strong consumer brand in Europe. “Social technology” is a key concept behind Speedy Tomato, Telia’s interna- Speedy Tomato offers basic services with global content along with commu- tional mobile portal. Heavy on the social. Speedy Tomato supports and inspires nications services and country-specific services with local content. Examples of people in their daily lives and when spending time with family and friends. This is today’s services include a personal calendar and address book, e-mail direct to a the creation of a new interface to “real life,” a helpful friend for everyday life and mobile phone, SMS,WAP searching, customer-selected news, ads from personally special occasions, with particular focus on social life and interaction. The portal selected companies, financial news, sports, weather, etc.The portal is a multi-port- also has communities for customers with shared interests, communities that can al and will later on be completely access-neutral. be expanded in all the countries where the portal is available. And the number of The portal is personalized, of course, i.e. users create their own user profiles countries will keep growing. with personally adapted services. “Most portals today focus on the technology they can deliver,” says Anne Lil- “We expect communities to be a major feature of the portal,” says Anne Lil- jeroth, Communications Director for Speedy Tomato. “We believe that people are jeroth,“where people interested in a specific area share tips and help each other – not especially interested in technological details. They just want to know how they and maybe meet in person.” TELIA 2000

18 PORTALS

Opening the doors to a wealth of information

Portal operations are an important part of Telia’s transition from a traditional telecommunications company to a modern IT and service company offering a wide variety of sophisticated services. Today’s development is rapidly moving towards terminal-independent multi-portals focused on interesting content.

Portals are part of Telia’s core business for several reasons. Portals preferences the user sets, the sharper the focus. are very important tools for strengthening customer relationships. Users can combine business with pleasure in One significant aspect of this is the development of personalized their personalized portals. An individual user portals which allow the user to configure the content of the portal may want to add a news service, for example, to suit his or her own interests. Personalized portals will be used by to obtain news about his or her areas of more and more consumers as their start pages and gateways to all interest – everything from Italian politics to interaction over the Internet. For Telia, this means that portals can sports scores, even in real time. Users can also generate and secure traffic while serving as an effective platform play games in the portal, listen to music, read for introducing new services. newspapers, order films, follow live broadcasts Portal operations are also an important part of Telia’s transition over the Internet, complete banking transactions and from a traditional telecommunications company to a modern do their shopping. communications and service company offering a wide variety of Portals also provide quick and easy access to a variety of serv- sophisticated services. Using por- ices. Via portals, users can currently make travel reservations, look “Portal operations are an tals, Telia will be able to use and up telephone numbers, find the nearest pharmacy, add to their own important part of Telia’s strengthen its position in fixed telephone and address books and send e-mail and SMS messages. transition from a tradi- tional telecommunications and mobile broadband by provid- And users can manage not only their own information over the company to a modern ing incentives for customers to Internet, but even data for the whole family, such as schedules and communications and move up along the value-added memos. service company offering a wide variety of sophisti- chain. This means that price cuts Securing interesting content for portals is the most critical fac- cated services.” in our traditional telephony busi- tor for portal penetration and determines how much time it takes ness can be compensated by rev- to establish new consumer and business customer patterns. enues from new types of services that are available via portals. Some services can be unique to the portal and possibly pro- Telia is one of the pioneers in portal initiatives, both for private duced in-house, but a great many can also be linked or repackaged consumers and business customers.Telia started www.passagen.se from other sources. External services can also be packaged and pre- already in 1995.Today, this portal is run by Telia’s associated com- sented under the portal’s or portal owner’s brand. Connecting pany SOL and is one of the most popular Internet portals in Swe- interesting content providers and applications to the portals has den. MyDOF, launched in 1999, was one of the first mobile portals gained great strategic importance. in the world. Portals today are developed and run by both telecom operators and other players.Operator-depend- A new phase of Internet use ent portals are portals connected “Portals generate rev- enues from advertising, The Internet has skyrocketed to become our largest source of and exclusively to one subscription by a transactions, and commu- channel for information. particular operator. Because these nications services.Adver- More and more services are distributed and executed over the are significant for locking in traffic, tisers and e-commerce Internet. operators will compete fiercely companies use portals to direct their offers to The use of the Internet has now entered a new phase, where the using these subscription-dependent specific target groups.” focus is on sorting information and services for quick access to the portals. desired information and services free of clutter. Portals are one way Today’s developments are rapidly focusing on terminal-indep- to structure information and routes and, as the name indicates, endent multi-portals, i.e. those that can be accessed from all types serve as doors to a world of information and services with a cus- of terminals: mobile, fixed (PC and cable TV) and via all types of TELIA 2000 tomized focus – the user determines the level of detail. The more access at different transfer speeds. 19 PORTALS

Different sources of revenue gic advantage since Telia, in contrast to many competitors, has Portals generate revenues from a variety of sources: advertising, expert knowledge of and access to all types of accesses. transactions and communications services. Advertisers and e-com- Several studies have shown that the growth in mobile Internet merce companies use portals to direct their marketing efforts and will undergo vigorous expansion. There were approximately 6 mil- offers to specific target groups and interested users. lion mobile phones with access to the Internet in Europe at the end More ways to create sources of revenue and earn money of 2000. According to the analyst company Ovum, there will be 80 on portals will be developed. Operators, with their large customer million wireless data users in Western Europe in 2003, and in 2006 bases, should be among the winners. The commercial interest in approximately 700 million mobile phones (corresponding to 45 portals is not due mainly to the technology, but rather to the mag- percent of all mobile phones worldwide) will have access to the nitude of the customer base and the content that portals provide. Internet. Future development will be com- Today’s services for mobile Internet are limited due to relative- “Securing interesting mercially driven by the creation of ly low transfer speeds. But with the rapid introduction of new tech- content is essential for a portal’s penetration. services beyond purely information- nologies, such as HSCSD, GPRS, UMTS and fixed radio-based broad- The trend is towards al services.These services will finance band solutions, an upward surge is expected in mobile Internet and more extensive collab- as well as link information to a great mobile portals. oration, sometimes extent. The market for mobile Internet is expected to show robust partnerships, between service providers and Operators must enter into agree- growth and Telia is already at the forefront, ready to capture part operators.” ments with interesting content of the European market. providers and applications.The trend is towards more extensive collaboration, sometimes partnerships, Telia’s portal strategy between service providers and operators.This is how a more attrac- The Nordic market is the leading European market in terms of the tive information and service offering is built, to serve as the basis use of mobile phones, Internet and PCs, and Sweden tops the world for revenue. market for IT maturity in both the consumer and business markets. Telia anticipates that more and more sales of goods and services This gives Telia a unique advantage for developing the portal serv- will take place through portals. For this to happen, portal owners ices of the future. must successfully establish themselves as “consumer aggregators,” Telia’s portal strategy can be summarized in the following which means that they must bring consumers together in the same points: place, for example like in a shopping mall. This also enables infor- To develop Sweden’s leading consumer-targeted multi-portal mation to be gathered about consumer patterns and sales to be by building on our large customer base and our rich technical plat- focused to the advantage of both the customer and supplier. This forms. will be the most important commercial function of portals. To develop mobile, operator-independent portals in order to take a position on the European mobile Internet market without Development towards multi-portals constructing and operating wholly owned networks. There are no pure broadband portals on the market today. All To use Telia’s strong brand to create partnerships with attrac- have elements of both narrowband and broadband, and this is tive content and applications providers. likely to continue for some time.There is no reason to use broad- To coordinate the Group’s developmental efforts regarding pay- band for applications such as today’s e-mail messages. On the ment and security solutions in order to minimize costs and secure other hand, broadband makes it portal quality and functionality. “Developments are now pos-sible to develop new types Telia’s multi-portal, to launch at the end of the first quarter of focusing on terminal- of services for electronic mail, for 2001, will be the heavyweight portal initiative on the broad con- independent multi-portals, i.e. those that can be example video-mail. sumer market in Sweden. The importance of this new portal can accessed from all types of Telia anticipates that all por- hardly be overestimated since it aims to “lift” Swedish households terminals: mobile, fixed tals will offer broadband material into the world of broadband. (PC and cable TV) and via all types of access at in coming years, as well as both The initial stage of the new portal is startsidan.telia.se, where different transfer speeds.” fixed and mobile access. Telia has already launched its first broadband services. This start This will make the major por- page is gradually being developed and will be transformed into tals multi-portals with less to differentiate between the various Telia’s multi-portal at the time of the launch. portals. Access to, or at least control of, a wholly owned network Speedy Tomato will be Telia’s portal on the European market is essential for the success of a portal, but it is the customer base and Telia’s avenue for taking a position on the European mobile that is the most important factor and this customer base can only Internet market. The portal, which is operator-independent, was be maintained by the company that provides attractive services test-launched at the end of the year in the U.K., and in Denmark and content. and Finland at the beginning of 2001.

Robust growth in mobile Internet Internet services will be reached more frequently through portals, which in turn are reached through computers, mobile phones, TVs

TELIA 2000 and handheld devices (PDAs). From Telia’s standpoint, this termi- 20 nal-independent or access-neutral development is a major strate- otlDsrpinadmre Exampleofservices Description andmarket Portal of which most are adapted to specific target groups. and SOL joint owns product minority development. shares in other portals, in the Nordic portals countries.These share a common technical platform SOL is an associated company that operates the largest network of portals www.suomi24.fi) Scandinavia www.sol.dk,Online – www.sol.no, SOL (www.passagen.se, PCandlatereven mobileportals. for media portal TV, theNavigator willberelaunchedasacross- In2001, Internet services. The comhemwebsite features anavigator for digital forTV andaportal Navigator (www.comhem.se) inNorway. starting Sweden, outside The willalsobelaunched portal collaboration withOracle. Halebopwas developed in butcanalsobeaccessedfrom aPC. terminals, Halebop isanoperator-independent thatismainly for portal mobile Halebop (www.halebop.com) acclaimed Sweden’s best WAP portal in 2000. able to all customers with mobile subscriptions with MyDOF was Telia. MyDOF is one of the first portals in the world for WAP users and is avail- MyDOF (wap.teliamobile.se) mercially in 2001 in several markets in Europe. The portal was test-launched during the year and will be launched com- which Telia will offer services in the European end-customer market. Speedy Tomato is an operator-independent portal for mobile terminals on Speedy Tomato (www.speedytomato.com) Several broadband serviceswere during theyear. launched market. is thefoundation for Telia’s for multi-portal theSwedish consumer This page start hasabroad rangeportal ofcontentservicesandfunctions. The is website startsidan.telia.se The Telia’s for Internetusers. portal (www.startsidan.telia.se)Startsidan Gula Sidorna Nära • Dig (a service that E-mail • Own WAP• pages Search engines • Games • •News Wine recommendations • Ticket booking • Bank account balances • The following broadband services • Games Games on Demand • Musikkanalen • Nöjesnytt • Nyhetskanalen • Hockeyrinken • launched during the year: ihtx,sound and video with text, Games • Shopping • Banking services • chatrooms E-mail, • TV listings • news, entertainment, music, Film, • -al htom,SMS chatrooms, E-mail, • Web-based meeting • places E-commerce • Broad range • of locally adapted Current film showings • gaming Lottery, • Local news • top hits Music news, • SMS E-mail, • Transactions between• bank accounts share prices, Financial news, • Personal calendar • WAP searching • SMS E-mail, • stock sports, weather, News, • such as: ices, content and communications serv- Basic services with global content. Country-specific services with local locates and guides users to businesses) ete,sot,financial news sports, weather, content services exchange rates market reports were PORTALS 21 TELIA 2000 22 TELIA 2000 TELIA RESEARCH nac n niha xeine o xml,a hockey game. for example, enhance and enrich an experience, can services information with combination in broadcasts Research Center.The concept demonstrates how live video Video In Your Palm. Wireless terminals, mobile to video live for solutions develop to world the in companies first the among was Research Telia applications. wireless and mobile noteworthy system solutions and service concepts for Teliaof number Researcha presented year, the During another. to terminal of type one from uninterrupted moved be can – which means that the service – while in use offer session mobility, to able be to is goal The forms. access and terminals of types all that they function forinformation i.e. are transparent the and scalable, and services the that and systems and infrastructures lying This requires interoperability between under- terminal andaccess. of type the and location geographic user’s the of regardless able avail-are that services mobile and systems of types and concepts new creating towards is communications personal in trend The IP-basednetwork services • Broadband servicesfor homeandbusiness • Personal communications • trated mainly onthefollowing areas: networks. local wireless of generation next the on consensus reaching on focusedforum industry open international an Forum, Global lan2 Telia Research led the initiative during the year to establish Hiper- 2000. in California ValleySilicon in in unit smaller a established Telia Researchoperator meetsthecustomer–inmarketplace. the where directly completed be must work developmental that short so become have launch market to concept from times lead end-customers in order to be sure our initiatives are with on target.The cooperates increasingly and development, of forefront the at Teliabe to orderlevel in international Research an operateson hs eeomn i i coeain ih Mäkitalo with cooperation in is development This Wireless videoright inthepalmofyour hand System interoperability andscalableservices concen- year the during efforts developmental and Research business. 1 April 2001istostrengthen theR&Dcompany’s positionasadriving force for renewing theGroup’s Oneofthereasons for thenew organization ineffect asof leading players withinITandtelecom. end-customers andotherinternationally Research works together withtheGroup’s businessareas, to Telia’s Telia To businessrenewal thisend, andensure theGroup’s long-termcompetitive strength. istocontribute The theGroup’s primary taskof research anddevelopment company, Telia Research, and innovation Telia Research –driving businessrenewal Telia Research began studying and developing methods for elec- for methods developing and studying began ResearchTelia onthemobileterminalscreen. bankoranindividual, store, for example a the positionofperson orthingyou wishtofind, maps which concept, service FinderFriend the presented and ices serv- Teliapositioning these developedResearch then boaters). to and tailored businesses) service Yachtsimilar (a Dig NäraPosition to users guides and locates that service (a Dig Nära Sidorna Gula completely new typesofmobileservices. developing for foundation the lays this positioning, and identification for technologies with Combined video. of even reception, quality high whilesecuringeven terminals frommobile Internet, the to connected continuously be to possible it makes GPRS, of launch the introducedwith and packet-switching and gy technolo- data on based networks, mobile generationof new The players. individual the of reactions the with along up, close extremely viewers are abletofollow thegame camerashelmets, their to attaching and monitors pressure blood and playerspulse the with equipping By Mobile electronic commerce including year, the during services positioning launched Telia New positioningservices tronic commerce early on, concentrating on concentrating on, early commerce tronic new typeofwireless application. payment transactions. idr s n xml o a totally a of example an as Finder Extensive initiatives were taken dur- taken were initiatives Extensive Telia Research developed Friend ing ing the year to develop services for oieeetoi omre m- commerce, electronic mobile omre Thesecon- a include commerce. et o mbl wles based wallets, mobile for cept geographic location.” accessor terminal, to servicesregardless of securing theuser’s access i.e. sonal communications, Telia’s R&Defforts isper- “One overall goal for finished product.” times from conceptto order thelead toshorten with end-customers in carried outincooperation “R&D isincreasingly being the samelocation. at all were they if as together work to team a allow and Internet meeting rooms that are connected over i.e. the tual meeting place, regardless oftheirphysical location. and ITtoolsthey need, freely with their companies and have access to all the information communicate employeesto allow that office virtual the for cepts con- developing on is focus the front, customer business the On the useofInternet-basedservices. are phones screen use to therebymorecontribute and to adapters, attractlate to expected easy and Affordable e-mail. receive and send as well as surf calls, make to users allow that available be will phones screen Internet-ready Soon 2001. in results yield to expected are that implemented were initiatives severalthe During year, PDAs. devices, handheld and TVs including PCs, than voice over theInternet. i.e. ny, telepho- IP quality high and Internet, overthe PC a on broadcasts the ability to follow video i.e. effective streaming, Internet service, enhance sound and image goal that quality.The is to create a first-class technologies and methods finding on is development new of focus the home, the for services broadband to comes it When andprovidescheckouts several new services. traditionalreplaces that 2000 in cart shopping electronic an oped Teliadevel-Research possibilities, the Todemonstrate services. of opens up the potential for a boundless new world and positioning, play inothergames. thelotteryortake part commuter pass, a as use identification, show balances, account check or accounts Telia Research is also focusing on the development of session of development the on focusing also is TeliaResearch Another area of development for the business market is the vir- Virtual officesandmeetingplaces other terminals on work also must services broadband Future First-class Internetservicefor thehome incombinationwithservicesfor identification Mobile Internet, trs rnfr oe between money transfer stores, mortar” and in “brick and Internet ments when shoppingbothonthe to use mobile phones to make pay- It will be a possible physical wallet. on using a mobile phone to replace mobile terminalsareality. make live videobroadcasts to panies intheworld to one ofthefirst com- Telia Research was tomers differentiated levels ofsecurity infuture services. cus- offer and quickly more services develop to Teliaenable will that services broadband on and networks IP for architectures rity and solutionsbasedonfixed radio. fiber-basedgenerationsfutureon solutions of as well solutions as its XDSL concentratedthe and ADSL Researchof development the Telia furthering on resources 2000, in on accesses work developmental broadband its In way. cost-effective a in demand launched on the market and Telia must be able to satisfy customer broadcasts over IP. TVandradio astelephony, such ices withhigh-level requirements, opti- routing mization project is creating opportunities for The Telia to support serv- networks. private virtual IP-based supporting of capable be will operations transit its with which Carrier, tional for TeliaInterna- services new creating is initiative (QoS) Service of Quality IP The performance. and price choose to customer the that fully utilizes the possibilities of optical technology and allows effectiveand platformnetworkopen an using IP, on services work net- of range unique and differentiated a offer to able Teliabe to for is initiative services network IP-based the of goal overall The and teamoffice.”“the virtual net” continue totakewhile inthecar. part wantsto she if only audio to even and PDA her conferenceto the A participant who has to leave the conference is then able to move with fixed video conferencing equipment. tual conference may be in started a room vir- a example, For terminals interruption. without different between service a which makes it mobility, possible to move Telia Research was alsoactive in2000developing new secu- are services new as growing is bandwidth for demand The IP-based network services yearon wereduringthe cabi- tests begun file Pilot virtual “the commerce.” mobile electronic the year todevelop were taken during “Extensive initiatives TELIA RESEARCH 23 TELIA 2000 ORGANIZATION

Group Structure

A new Group structure is being introduced on 1 April 2001 in order to strengthen Telia’s orientation and promote internationalization while laying the ground for Telia to participate in the restructuring of the industry. Telia’s management is divided into two constellations, the Executive Committee and Group Management.

Organization and management in 2000 area’s operations and received his or her mandate and assignment During 2000, operations were organized in five business areas. Each from the CEO through delegation. business area had total responsibility for its respective products on all markets. Organization and management as of 1 April 2001 Mobile business area: Mobile networks, mobile services, and A new Group structure is being introduced on 1 April 2001 in order other wireless applications. to strengthen Telia’s orientation and promote internationalization Carrier & Networks business area: International carrier opera- while laying the ground for Telia to participate in the ongoing trans- tions and network wholesaling in the Nordic countries. formation of the industry. The new organization makes it possible Enterprises business area: Companies to be divested in whole or to cultivate the Swedish market more effectively. in part. The new business areas under formation will continue to be Business Solutions and People Solutions business areas:The Telia responsible for their respective products, from development to Group’s service providers mainly on the Swedish market. Packaging sales, on all markets, in Sweden and internationally. and integrating the Group’s products and services with special A joint sales and customer unit for consumers and business cus- responsibility for developing services based on the fixed network. tomers is being established on the Swedish market to serve the The President and CEO had full responsibility for the Group’s business areas. operations and the ultimate responsibility to the Board of Direc- Telia Research is expanding its operations and will report direct- tors. The CEO is supported in her tasks by Group staff units, which ly to the CEO. include specialists in accounting and finance, legal issues, commu- Telia’s management will operate in two different constellations, nications, organizational development, and human resources.To be the Executive Committee and Group Management. able to consult others on decisions affecting the entire Group, the The Executive Committee handles issues concerning the CEO has appointed a Group executive management team of seven Group’s strategic development, business control and Group-wide people, including Telia’s Chief Financial Officer, head of Corporate measures. In addition to Marianne Nivert, the President and CEO, Development and Human Resources and three business area heads. the Executive Committee includes Bo Jacobsson, CFO and Head of Each business area head had full responsibility for that business Corporate Financial Control, Lars Härenstam with special responsi-

Organization and Management in 2000 Shareholders

Board of Directors

President and CEO Group Head Office

Mobile Carrier & Networks Business Solutions People Solutions Enterprises TELIA 2000

24 ORGANIZATION

Organization and Management Shareholders as of 1 April 2001 Board of Directors

President and CEO

Telia Research Group Head Office

Telia Telia Telia Telia Telia Mobile International Internet Networks Equity Carrier Services

Five new business areas are being formed. Each business area has and customer unit to serve the business areas is being established on responsibility for its respective products on all markets. A joint sales the Swedish market. bility for Corporate Development and Human Resources, and Jan kets, primarily to customers in the Swedish market, but also in Rudberg with special responsibility for new business. other Nordic country markets and in the Baltic region where Telia Group Management operates in an advisory role to Telia’s CEO. has operations. The business areas’ strategic decisions are handled by Group Man- The business area also includes the Telia Net router operations. agement.The Group Management team includes, in addition to the Business Area Head: Jan Johansson, previously business area executive committee, the five business area heads; Michael Kong- manager at Vattenfall. stad, Communications Director; Emanuela Pedrocco, Marketing Director, Skills Market; and Anders Gylder, Director of Telia Sweden. Telia Internet Services An environmental management system will be established in Telia Internet Services is responsible for the Group’s Internet serv- order to clarify environmental roles, responsibilities and routines. ices: accesses, applications and portals. The business area offers Internet services to consumers and business customers in Sweden The following five business areas are under formation: and other Nordic countries. Telia Mobile Business Area Head: Indra Åsander, currently Marketing Direc- Telia Mobile is responsible for the mobile network, all mobile serv- tor for Skanova in Carrier & Networks. ices and for the development of integrated fixed/mobile services. The business area offers network capacity and mobile services on Telia Equity the wholesale and retail markets to consumers and businesses in the Telia Equity is responsible for the Group’s stakes and interests out- Nordic countries and mobile portal services in Europe. Telia Mobile side of Telia’s core businesses. largely comprises the operations of today’s Mobile business area. Business Area Head: Eva Lindqvist, currently project manager Business Area Head: Kenneth Karlberg, currently head of the for partial divestitures of companies within Enterprises. Mobile business area.

Telia International Carrier Telia Sweden – joint sales and customer unit Telia International Carrier is responsible for the international carrier Telia Sweden is forming a joint sales and customer unit for con- operations in Europe and the United States, including some business sumers and business customers in Sweden.The unit acts on behalf in Sweden. The business area produces and sells international net- of the business areas and is responsible for sales, invoicing and cus- work services in the form of infrastructure, network capacity, and tomer care under Telia’s brand on the Swedish market through its transport of IP and telephony traffic as a wholesaler to operators and own sales organization and through retailers. service providers.The business area largely comprises the operations Responsible: Anders Gylder, currently head of the Business Solu- currently run in the existing Telia International Carrier and Telia UK. tions business area. Business Area Head: Lars Rydin, currently head of international carrier operations in Carrier & Networks. Telia Research The new Telia Research is comprised of parts of Telia Business Inno- Telia Networks vation, the Group’s Business Intelligence and Information Center, Telia Networks is responsible for the fixed network, fixed telepho- Demotel and Teldok. The unit has Group-wide responsibility for ny services and data communications services as well as further research and development within the Group and is directly under development of the IP infrastructure. The business area offers net- the CEO. TELIA 2000 work capacity and fixed telephony on the wholesale and retail mar- Responsible: Claes Nycander, currently head of Telia Research. 25 MOBILE

Stronger position as the leading Nordic mobile operator

The acquisition of NetCom ASA in Norway was one of the most important events of the year and increased Mobile’s Nordic customer base by 773,000 customers. The acquisition was an important step in our strategy for cementing our position as the leading mobile operator in the Nordic countries.

The Mobile business area offers wireless services, everything from mobile networks and the development of new data-based services. communications services to services in information, electronic On the Swedish market, the number of customers grew during commerce and entertainment. The business area manages the the year by 619,000, an increase of 23.5 percent. The number of operational mobile business and is represented in all four Nordic customers on the Finnish market more than quadrupled to countries. In the Baltic states and Russia, the business area has a 149,000. In Norway, the number of customers grew by 850,000, market presence through Telia’s participations in the mobile oper- including the acquisition of NetCom ASA, while the number of cus- ators EMT (Estonia), LMT (Latvia), Omnitel (Lithuania) and in tomers in Denmark increased by 127,000.This customer growth is northwestern Russia through North-West GSM and Telekominvest. due to new services and attractive prices coupled with active mar- keting and market cultivation. The total number of customers in “The acquisition of Net- Successful year the Nordic countries at year-end was 4.6 million. Com ASA in Norway was on the Nordic market one of the most important The business area enjoyed great Sophisticated mobile market events of the year and success across the entire Nordic The Mobile business area is active on one of the most competitive increased the business area’s Nordic customer market in 2000. Mobile has in- and deregulated markets. The Nordic mobile market has the high- base by 773,000 cus- vested in substantial customer est level of mobile usage in the world with sophisticated and tomers. The acquisition growth, which has expanded our demanding customers. was an important step in our strategy for cementing Nordic customer base by a total The large customer base is “Competition is growing on the our position as the leading of 1,712,000 customers.The acqui- one of the business area’s main mobile market, making it more important than ever to take mobile operator in the sition of NetCom ASA in Norway assets and a prerequisite to Nordic countries.” active care of our customer was one of the most important drive the migration from fixed relationship. Several initiatives events of the year and increased to mobile networks and new have been carried out in order the business area’s Nordic customer base by 773,000 customers (at services. Lower mobile teleph- to strengthen the relationship with our customers and the time of the acquisition in June 2000). The acquisition was an ony rates will also facilitate increase our already high level important step in our strategy to be the leading mobile operator in the migration from fixed net- of customer loyalty.” the Nordic countries.The business area estimates that the acquisi- work to mobile, which will tion will create significant synergies in the expansion of future even have a positive effect on traffic development. As the market approaches saturation, it is crucial that we focus on developing new services and new applications for mobile com- Mobile Business Area, Facts & Figures munications. Mobile has carried out intensive development on technical platforms and new services during the year. Competition Role in the Group: Responsible for the Group’s mobile networks, mobile services is growing on the mobile market, along with product and service and other wireless solutions. offerings, making it more important than ever to take active care Customer segments: Businesses and of our customer relationship.The business area has accordingly car- private consumers in the Nordic countries, ried out several initiatives to strengthen our relationship with cus- the Baltic region and Europe. tomers and increase the already high level of customer loyalty. Net sales: MSEK 14,276 Underlying EBITDA: MSEK 3,353 Ready for 3G Business Area Head Operating income: MSEK 1,571 Mobile is well prepared for the greater bandwidth and more Kenneth Karlberg TELIA 2000 Number of employees: 2,952 advanced multimedia services of the next generation of mobile 26 communications. MOBILE

When you need information on the go

You’ve got a splitting headache! Where is the nearest pharmacy? Telia was the first company in the world to offer positioning services in the GSM network. In June 2000, Telia launched the service Gula Sidorna Nära Dig (a service that locates and guides users to businesses), which uses the GSM system to determine the position of each mobile telephone. The user can connect to the Gula Sidorna (yellow pages) database with information about various services, e.g. pharmacies. The positioning service can be used to locate the nearest bank, flower shop or hotel to the user’s current position. All the user needs is a Telia sub- scription and a phone with either WAP or SMS capability. Telia customers can initially search among approximately 25,000 companies in Sweden using ten search keys: pharmacy, bank, gas, auto repair, flowers, tires, salon, hotel, locksmith and restaurants. There is a similar service for boating enthusiasts along the coast, Yacht Position Nära Dig, which provides information about the nearest harbor and boat refueling station. The positioning services work nationwide, wherever Telia’s GSM network provides coverage. Down the line, Telia will be able to introduce services, for example services that alert you when you pass a shop selling goods you may be interested in purchasing. Telia is currently testing services for the transport sector. One example is a service that helps trucking companies track their vehicles, making it possible to pro- vide better service, greater cost-efficiency and security. The market for mobile positioning services in Sweden alone is esti- mated to be worth approximately GSEK 2 through 2005.

The business area is building a mobile data network, based entirely Upgrading GSM for high speed on IP technology. The new infrastructure will give Mobile a head To boost transmission capacity for mobile data, the business area start on offering customers new innovative services throughout began upgrading the GSM network using high speed technology the Nordic region. Data traffic is now gradually increasing in the during the year. This technology raises the data transfer rate from business area’s networks and the new platform will be able to han- 9.6 kbps to 38.4 kbps. dle a substantial jump in IP-based traffic. High speed technology is one step in the development towards The IP network, which started construction during the year, will the future’s advanced mobile data services. The new technology be used as a platform for both GPRS and UMTS. The most impor- provides faster access to the Internet, e-mail and company tant step towards third generation mobile telephony will come intranets. All the business area’s mobile customers with Telia’s pre- with GPRS technology. During the year, preparations were made to mium service Mobile Data and customers with DOF subscriptions offer GPRS services in all the Nordic countries in 2001. have access to the higher speed. GPRS provides packet-switching of data traffic at speeds up to In order to ensure full nationwide coverage in Denmark and 115 kbps, which makes it possible to be continuously connected to thereby attract more customers, Mobile applied for and obtained a the Internet via a mobile phone. GPRS will initially offer speeds of GSM 900 license during the year. This investment also means that up to 40 kbps. we will be able to reduce costs for domestic roaming. During 2001, Mobile will be ready to offer the first UMTS serv- In Finland, a roaming agreement was signed with the mobile ices in Norway. In Sweden and Finland, UMTS services are set to be operator Radiolinja, which means that Mobile is able to offer launched in 2002 and in Denmark in 2003. nationwide coverage for its GSM services, which in turn increased In order to quickly gain access to a UMTS license in Sweden, the stream of new customers. Telia signed a cooperative agreement during the year with Tele2 AB On the Swedish market, it was time for the previously (NetCom AB) for the expansion of third generation mobile network announced close-down of NMT 900. Several other countries are UMTS via a new company, a 50:50 venture which will utilize Tele2’s also shutting down their NMT 900 networks in favor of the GSM (NetCom’s) UMTS license. system. The business area continues to operate the NMT 450 net- No decision regarding participation in the bid for a UMTS work, however, which still has advantages thanks to its excellent license in Denmark has yet been made. coverage in sparsely populated areas and coastal areas. TELIA 2000 27 MOBILE

Mobile portal for the European market Unique positioning services Several products and services were developed during 2000, all New services were introduced during the year with the launch of based on service, simplicity and good value in order to satisfy cus- two of the world’s first commercial positioning services designed tomer needs. Major development efforts were made on mobile to reach a wider general audience; Gula Sidorna Nära Dig and Internet and broadband solutions. YachtPosition Nära Dig. The latter service provides boaters with During the year, Mobile was dedicated to the construction of access to local information such as the location of the nearest har- the mobile portal Speedy Tomato, which the business area is using bor or boat refueling station and local weather conditions. to establish itself on the European mobile Internet market.The por- Positioning functions are expected to gain importance as these tal was test-launched in the U.K. and Denmark at the end of 2000. services continue to be developed. Using the customer’s geograph- A test-launch of the portal was also initiated in Finland at the ic position to identify offers that are of interest in that area creates beginning of February 2001. unique opportunities for “targeted” offers. The business area has This portal allows customers to select access to several func- worked closely with Ericsson since the beginning of 2000 on the tions such as SMS, WAP services, personal calendar, address book development of positioning services. and other services.The range of services is initially limited, but will These positioning services can be used by all of the business gradually be developed to meet user needs. area’s mobile customers. The resources in Speedy Tomato have been gathered in an independent company in order to boost the strength of this ini- M-commerce initiative tiative. Cooperative agreements with content providers and appli- One high-priority development area is mobile electronic com- cation suppliers will secure the attractiveness of the portal. A part- merce (m-commerce), i.e. using mobile telephony for commercial nership agreement was signed in February 2001 with the Italian and payment transactions. Mobile has joined together with the company Olivetti Tecnost for establishing Speedy Tomato in the Swedish bank FöreningsSparbanken to start a project for the devel- Italian market. opment of mobile payment systems. The MyDOF portal, previously accessible only to customers with In this collaboration, FöreningsSparbanken is responsible for DOF subscriptions, was made available during the year to all of payment and authorization processes while Mobile handles the Mobile’s customers, including prepaid card customers. MyDOF was technical platform, adapted to SIM cards and PKI (Public Key Infra- acclaimed Sweden’s best WAP portal by the magazine Mobil in 2000. structure) certification. Pilot tests were initiated on a number of

Permitto Care – IT for public home health care

Mobile Internet may revolutionize fieldwork in home health care. Work- ers in this industry are constantly on the move and need to quickly reach their “home-base” in order to report information or receive assistance in a particular situation. During the year, the Mobile business area worked together with Sweden’s public home health care organization to develop Per- mitto Care – a mobile Internet-based service that provides care- givers, an extremely mobile group, with access to critical data and allows them to quickly document and report important events or actions. The service can also be used to assign tasks and coordinate staff. The service is a great time-saver, which means that the caregivers have more time to provide healthcare and other related services. The public home health care organization leases Permitto Care from Mobile, which is responsible for operation and maintenance and helps train users. The public home health care organization obtains the required mobile terminals and Internet connections.This organization is the first to use mobile Internet for its communications needs, but the demand for this type of service is expected to be very big from other industries with a large number of field workers. TELIA 2000

28 er including80hotels. the during year, country the around locations at installed was Mbps, which provides transfer rates HomeRun, up to 11 intranets. panies’ com- their and Internet the to connect easily and quickly can ple in such public as meeting hotels installed whereplaces, and trainpeo- being stations, gradually is which access, broadband wireless New Business also participated in a the development of HomeRun, tions (M2M). communica- machine-to-machine for services of types different December 1998 since with venture Wirelessjoint Maingate a AB forin the involved development been of also has Mobile AB. Drutt Svenska company the by run is which Halebop, portal mobile the of this is the cooperation between the business area and Oracle for One wasoping example alliances very and successful. partnerships, which The is New responsible Business for unit, creating and devel- ers alarge oftheEarth’s surface. part cov- and INMARSAT’ssystem uses satellite service The kbps). (64 rates ISDN to comparable rates transfer with services satellite of world to launch the the Global a in Area new Networkoperators generation service, first the of one became also area business The targeted atmunicipalities andcounty services. primarilyis and services medical and healthcare in used is ization, developed in cooperation with the public home health care organ- Care, Permitto service, WASPfirst The year. the during Provider) Service Application (WirelessWASPa as operating began Mobile company intranet. the to access WAPand Office Wireless e-speak, as such services This initiative iscalled er withGSMusingIP. Telia Bright andoffers exciting new technology in which local networks are linked togeth- an is This IP. over communications data and telecommunications tomers. cus- recruiting of cost the reduces which terminal, the for count dis- no is there that means subscription of type this standpoint, FromMobile’s contract. 24-month or 12- a sign customer to need not does the that is Fri” “Mobitel behind concept The year. the The wasnon-subsidized subscription launched during “Mobitel Fri” service iscalledPark&Ring. payment forarea completed parking.The pilot testing on “mobile” services. data mobile gatewayto a as serves and year the during expanded greatly was SMS of use The signals. ring downloading including functions for sending postcards from mobile phones and area business The 2001. of already offers themobilee-postgiro service. part latter the during nationwide services launch to able be to expect We fall. the during services Mobile Internetin-flight Successful jointventures Global Area Network Wireless ServiceProviderApplication connect to world the in first wasthe area business Mobile The Subscriptions withoutsubsidies business the TogetherParkering, Stockholm company the with year, the during launched were services SMS of types New The business area signed an agreement with SAS in 2000 for 2000 in SAS with agreement an signed area business The opment andskillsrecruitment. which is expected ations, to add to the focus on competence devel- existing development was divided during the year within the for Swedish oper- development Responsibility for competence employees. business development and employee facilitates and easier staff new very recruiting makes which a employer, an it as makes “brand” strong position Nordic unique Mobile’s munications. The demand for skilled employees is extremely high in mobile com- the Carrier &Networks businessarea. to moved were networks) mobile of operation and (construction operations contracting network the year, the During outsourced. the to mobile belong core business not are transferred do to another that business area Operations or are measures. efficiency and mented a refine and focus strategy while carrying out streamlining itability of the the mobile Mobile business, business area has imple- prof- the in development positive continued a ensure to order In sales ofmobileinformation systemsfor publictransportation. and development the on focusedwere company’soperations The Russia. in northwestern severaloperatorsin mobile interests has turn in which cominvest, which holds 85 percent of the acquired, investment company Tele- tially higherrate for terminatingtraffic. substan- a for court the petitioned has area business Mobile The 2001. January 8 of as applicable is rate This minute. per 1.35 SEK at compensated be will traffic interconnect Telia’s that decided im order in the county administrative court in December.The court and inter- PTS Teliabetweenan action reached legalongoing The tunity tosendandreceive e-mailin-flight. will make SAS the first European airline to offer passengers This the oppor- and airplanes. test onboard to access Internet together wireless joined implement also have parties The lounges international worldwide. airline’s the of all in HomeRun installing A strong employer brand Focus oncore businessandstreamlined operations divested. was AB ITmobilThoreb in interest participating The Interconnect rates During the year, 29.5 percent of First National Holding was Holding National First of percent 29.5 year, the During MOBILE 29 TELIA 2000 30 TELIA 2000 CARRIER &NETWORKSCARRIER data andvideoathighspeeds. new types text, of packet-switching networks that can carry voice, makeson also demands Internet the Theof use overall world. the multiply content attractive with servers as traffic of globalization their serviceportfolios. complete to order in world the of parts certain in networks their as well as global players global who transport, need to supplement require but networks, own their have who players also are There levels. global or regional local, on traffic of transport and tomers but lack networks and need who both offeraccess to services, cus- players are There complex. more becoming is market the and ing establish operations on numberthe market.The of players is grow- and theuseofInternet. deregulation services: network and capacity network for market wholesaling the behind forces main the been have factors Two market and Telia InternationalCarrier for theglobalmarket. has been organized into Skanovatwo business forarea units, the business Swedish the Tooperations, wholesaling network markets. its strengthen international and Swedish the on traffic telephony and IP and capacity, network infrastructure, of form the in services network sells and produces area business Networks & Carrier The are ewrsBsns ra Facts &Figures Carrier &Networks Business Area, h epoie rwh n nent sg hs ceeae the accelerated has usage Internet in growth explosive The to players new for possible legally it made has Deregulation A wholesaling market for network operations Lars-Gunnar Johansson Business Area Head: Swedish wholesaling market. from external customers andattractive offers have helpedSkanova strengthen itspositiononthe greater demand At thesametime, Carrier isalsooneofthelargest carriers oftransatlantic IPtraffic. Telia andnetwork capacityinitsown International pan-European infrastructure. IPtraffic, telephony, The rapid expansion oftheViking Network hasmade Telia oneofthefew operators abletooffer wholesaling market A leadingplayer onthenetwork Number ofemployees: Operating income: Underlying EBITDA: Net sales: United States). tionally (withemphasisonEurope andthe (with emphasisonSweden) andinterna- service providers intheNordic countries Customer segments: Group’s network wholesaling business. Role intheGroup: MSEK 25,861 Responsible for the MSEK 3,414 MSEK 7,679 Operators and 3,486 capacity • customer-specific datacommunications solutions • broadband/Internet • Skanova offers servicesinsixproduct areas: in theotherNordic countries. marketedofferingsalso some are but market, main the is Sweden den has been run as an independent unit under the Skanova brand. As of 1 October 2000,Telia’s network wholesaling business in Swe- work offering high-quality servicesatcompetitive prices. egy here is to quickly establish a cost-effective IP-based carrier net- Thestrat- States. United the and Europe in networks IP major five three leading network wholesalers in Europe and to own one of the market. external the for solutions network of refining further and infrastructure the of development continued through position ing The goal on the Swedish wholesaling market is to secure Telia’s lead- are carried. traffic Internet of streams major a the where carrier, IP as transatlantic itself establish quickly to able then was New Yorkand and Stockholm between connection IP an Teliaestablished time, same the about At States. United the in networks IP constructing for license a obtain to Europe in ator Teliaoper- firstwas the 1995, after off traffictook Internet When country. works and access to practically all businesses and households in the net- logical of types different and networks transport nationwide largest company on the Swedish with network wholesaling market, bothinSweden andglobally. ket, mar- wholesaling network the on position a achieved quickly has Telia services, network-based developing and networks operating With its substantial experience and knowledge of constructing and Skanova On the global wholesaling market,Telia’s goal is to be one of the Objectives andstrategies market. IP international the on entrant early an Teliaalso was the and leader the Teliabecome already has Skanova, Through own infrastructure.” with othercompaniesthat used for swapping capacity and be soldtootherparties which can surplus capacity, our strategy istoinvest in effective carrier network, “In order tocreate acost- for approximately 15percent ofSkanova’s totalnetsales. accounted customers external from sales and 120 to 50 from number robust 2000,the of growth.In external customers rose showing is players external from demand although tomers, infra- and the best market capacity structure, coverage in network the Nordic countries. on based has, and Sweden connect traffic stipulatedby theregulatory authorities. tors andserviceproviders inadditiontooffering theinter- opera- to products network selling Teliaactively began ity. of the opportunity to do business on its own network capac- Telia was among the first telecom operators to take advantage interconnect • telephony • partner products (solutions • that combine Skanova’s products with n uoai AS dlvr sse hs en ul u t meet to up built been has system delivery ADSL automatic An condensed. and further speeds higher to upgraded was communications, data advanced networks. tors’ opera- other with connectivity IP simplifying cost-effectiveand it grated with Telia’sinte- global IP is platform making (the network Viking IP Network), Swedish The pace. rapid a at expanded being infrastructures. fiber-basedcomplete townshad and cities Swedish 121 year-end, At Sweden. in locations other as well Stockholm, as in Malmö, and out Gothenburg carried been have initiatives Major great demand. the to due jumped also has customer the to closest fiber The percentage of tions throughout allofSweden’s municipalities. single fiberpair. a of transfercapacity the multiplies which (DWDM), division multiplexing wavelength dense using expanded greatly also was ity the during year expanded at a rate of was 40,000 kilometers of Capac- fiber pairs per month. network), mobile network, telephony network, IP network, (ATMnetworks logical the for network port to meetthesurging market demandfor broadband services. which orientedis morenetwork, cost-efficient and better equipped infrastructurethe ing packeta networkcircuit-switchedfromto a improv-on is emphasis main The offerings. and products network different developing on and development, network on underway Skanova invested Major MSEK initiatives4,340 duringare the year. the endofyear.” tions via ADSL orLANby had broadband connec- Nearly 40,000customers delivery systemfor ADSL. constructed anautomatic Skanova “During theyear, those ofanothersupplier) 40,000 customers withbroadband connections for network nationwide circuit-switched a network, ATM The currently is network IP national the networks, logical the Of loca- 3,000 links currently network fiber-optic broadband The trans- a as functions which network, fiber-optic domestic The Heavy investment inpacket oriented networks ei’ on uies ra ae knv’ lret cus- largest Skanova’s are areas business own Telia’s in wholesalernetwork dominant clearlySkanova the is the year. tions connec- via ADSL or LAN by the broadbandend of had tomers cus- 40,000 Nearly demand. with is increasing delivery capacity in pace Skanova households. Swedish strong demand for broadband from h fis Seih prtr o fe I tlpoy o broadband to telephony providers who connecttheir customers viaLAN. IP offer to operator Swedish first the toutilize alower band. tinue con- services telephony while ices copper lines for their specific serv- in band frequency higher a lease to operators allows which lines, shared including products access additional launch will Skanova preparation for In the EU directive that took 2000. effect on March 2 January in 2001, providers service and operators competing to and NorrköpingsMiljö&Energi. HemEl, abonnera.com, including companies of variety a by used is service The data. billing provides and service the maintains and operates, produces, Skanova products. other their to value added and complement a as telephony fixed offer to Sweden in panies allowingcom- The TeleHostyear, the during was service launched on delivery ofbroadband connectionsbasedonADSL. year toabout40buildingcooperatives. the during delivered were solutions LAN LAN. and fiber of nation combi- a as such solutions, other delivers Skanovaalso but ADSL, on based are connections broadband household of majority The of thenetwork. 2 Theshowsand figurelevels 1 towns. and cities Swedish fiber-optic121 in rings Skanova has built In addition, locations throughout all of Sweden’s municipalities. Skanova has built a fine-mesh fiber-optic network in Sweden that connects 3,000 in Sweden Telia’s fiber-optic broadband network s f ac 20,Saoa is Skanova 2001, March of As Telia openeditsSwedish access networks On itsown initiative, IP telephony andothernew services Skanova and Telenordia reached an agreement in February 2001 their customers viaLAN.” providers who connect ony tobroadband operator tooffer IPteleph- va is the first Swedish Skano- “As ofMarch 2001, CARRIER &NETWORKSCARRIER Transmission nodes Fiber-optic cable 31 TELIA 2000 CARRIER & NETWORKS

First part of the Viking Network lit up in the U.S.

Telia’s U.S. presence took a dramatic turn in the year 2000, moving from an inter- national gateway provider to a full-fledged wholesale backbone network provider.Telia is lighting up 11,000 route miles of fiber-optic network with 11 points of presence in key metropolitan areas. When the network is com- pleted later in 2001, the U.S. segment of the Viking Network will be capa- ble of carrying domestic and European, Internet, data and voice traffic at speeds of up to 800 Gbps. In New York,while international voice services have been available since 1996, Telia’s network service began in January 2001, including backhaul services to our transatlantic connection to the TAT-14 cable system. Service will begin in the East Coast region followed by the Midwest in March. The West Coast will be in service in June. In July, interconnection between the East and West Coasts via a diversified and fully protected network will be operational. Both Coasts’ most northern network points, Boston and Seattle, will be added in the fall of 2001 to complete the nationwide network. “Whereas most of Telia’s competitors are trying to grow as quick- ly as possible and establish the biggest market share, Telia's business strategy focuses on being a quality provider with competitive pricing. As competition intensifies,Telia's superior ability to manage costs translates into long-term profitability,” explains Stephanie A. Lokmer, Vice President – Business Development. During 2000, in addition to imple- menting the U.S. network, Telia focused on establishing internal tools and building a highly skilled team for its U.S. operations. Besides being a facilities-based Seattle service provider, Telia manages its own net- Boston work operations center (NOC) – an impor- Prior to joining Telia, Stephanie was an international Chicago New York Denver Manasquan tant advantage for successful customer business development and marketing consultant, and Washington, D.C. founded and led a marketing communications agency. San Francisco Tuckerton service relationships. In these capacities, Stephanie advised European and U.S. Los Angeles The flexibility of Telia’s fiber-optic network is Atlanta telecom carriers, broadcast cable companies and pharma- Dallas a competitive advantage, providing a cost- ceutical and manufacturing companies. For these compa- effective and technically superior alternative nies, Stephanie opened up new markets in Germany, to established carriers on the growing whole- Switzerland, Canada, Mexico, Japan, and the Middle East. Miami sale market.

When completed in the fall of 2001, the Viking Network will cover the 11 largest metropolitan areas in the U.S., where more than 75 percent of long-haul traffic is transported.

Telia International Carrier higher values, the demands on network quality and security are Telia International Carrier was formed in March 1999 as an inde- becoming steeper. pendent unit in the Carrier & Networks business area. Its mission Prices are declining as access to capacity increases on the glob- is to produce and sell international network services to other oper- al market. In order to create a cost-effective carrier network, our ators and service providers on the entire global market. strategy is to invest in surplus capacity, which can be sold to other At the same time, Telia began an aggressive initiative to con- parties and the revenues can be used to keep down the costs of struct a pan-European fiber-optic infrastructure, the Viking Net- entering the market and for swapping capacity with other infra- work.The strategy was to rapidly establish a high-quality and cost- structure owners. This will allow Telia to expand the geographic effective international IP-based carrier network. A consolidation of reach of the network further or to increase the density of coverage. the international carrier market is anticipated within the next two The rapid pace of expansion has made Telia one of the few oper- or three years, and it is vital that Telia be among the major players. ators today able to offer telephony, IP traffic, and network capaci- Owning the network gives Telia International Carrier control ty in its own pan-European infrastructure. International Carrier is over both costs and the quality of the network, while making it also one of the largest carriers of IP traffic over the Atlantic and one

TELIA 2000 possible to develop value added services. As the electronic net- of the first European operators to begin doing business in the Unit- 32 works carry more complex information, in greater volumes and ed States with a wholly owned network. voice (telephony) atspeedsupto800Gbps. equipping thenetwork withIProuters andwavelength capacity. on year the during initiated was Work stake. percent 5.9 a holds the which of in the TeliaVikingvia Network TATAtlantic14 cable, part European the integratedwith is ThenetworkAmerican areas. urban larger the of most to coverage with States United the in networkfiber-optic18,000-kilometer-long an to access area ness Swaps with two American operators during the year gave the busi- andRussia. Poland, states, Baltic the Finland, connecting cable submarine a and route a awarded Petersburg-Moscowlicense to design a wasfiber-optic cable for the St. Carrier International Rostelecom, operator ian In partnership with the Russ- and Hungary. Austria, Czech Republic, and theGermandomesticsectionof Viking Network. routes, Helsinki-Haraldsholm and Amsterdam-Hamburg, seldorf, as well Oslo, as Amsterdam-Düs- the London-Brussels-Amsterdam, Stockholm-Helsinki-Copenhagen- Network, Vikingthe of section borg-Helsingör-Copenhagen andAmsterdam-Hamburg. Helsing- Gothenburg-Helsingborg, Oslo-Gothenburg, ing-Hamburg, Copenhagen-Kold- Malmö-Dragör-Copenhagen, Strasbourg-Frankfurt, Stockholm-Malmö, Nebel-Kolding-Århus, Northern 2000: in to 5,300 followingkilometers.The routes were brought into service while 4,070 ducts to were 13,000 extended kilometers, from 1,900 service providers. and operators to collocation and service capacity, infrastructure, infrastructure with other infrastructure owners and for the sales of DWDM. sion multiplexing, to was part install greaterducts and fiber the as well which as capacity of for dense wavelength year, divi- the during invested was 6,576 MSEK of total A 2000. during expanded further was work, Net- Viking the network, carrier fiber-optic international Telia’s partners and suppliers. as well as externally with pany, customers, for all types of – communicationswithin the – com- voice,data,video based virtual private network with global coverage that can be used resell which theservicetoend-customers. (ISP), Providers Service Internet at primarily aimed is early service The in 2001. service IP-VPN global a launched Carrier International Telia refined. continuously are offerings product company’s The transport ofIPtraffic • transport oftelephony • operation value added services as such collocation of equipment, • andwavelength) capacity(point-to-point • infrastructure (ductsandfiber) • refined: less or more products, main five offers Carrier TeliaInternational and maintenance The network in the U.S. will transport both IP traffic, data and data traffic, IP both transport will U.S. the in network The Positioned network the in underway is expansion network continued Europe, In The fourth quarter of 2000 saw the roll-out of the Scandinavian from extended was reach network’s fiber-optic the Europe, In swapping for year the during signed were agreements Several The Viking Network –oneoftheworld’s largest IPnetworks IP- an to access customers business gives service IP-VPN The Five mainproducts andcontinuousrefinement dled responsibly. ing routines andensures thatscrap andresidual products are han- purchas- our into requirements environmental integrates system The contractors. and suppliers, partners, includes managementalso that system environmental an established Networks & Carrier expanded from 27to52. leasing ofIPcapacitytripled during theyear. Demand for transport nificant of products IP further trafficon. and fic and leasing of IP capacity are expected to become the more sig- nect tothenetwork. high demands on with security and capacity can store their servers providers and con- content global large, where points these at – five inEurope andoneinNew TeliaYork. hassetupdatacenters ington DCinthebeginning of2001. in opened Wash-be will center operations third A Jönköping. and Stockholm in centers operations from monitored is network The infrastructure. the of share own our using world the in networks IP-based largest the of Teliaone has the Through Network, Viking freely swap traffic otheratnocost. witheach to able are status have1 Tierthat operators The Network. Viking the with integrated be will which network, IP an to access as well as States United the in status 1 Tiergained Carrier International Internet service provider AGIS.Through its acquisition of AGIS,Telia American traffic patterns. that means This Telia’sthe to relation strategicallyin is positioned networkcarrier traffic. long-distance American of percent 75 work will cover 11 of the which largestaccount forAmerican cities, the American section of the net- 2001, of fall the in be to expected is which network has been brought into service, entire the Once linked. be will Coasts East Coast and Westthe which after West (June), and (March) the Midwest be will Next 2001. of beginning York– the Corridor)at (East up Miami waslit New route network first The Environmental management system the in Presence(POP) Theof Points of number VikingNetwork butIPtraf- Telephony iscurrently thedominanttypeoftraffic, The Viking Network has six major interlinked connection points Huge demandonIP U.S. the of operations Telia the acquired 2000, of spring the In CARRIER &NETWORKSCARRIER Washington DC.” Jönköpingand Stockholm, from operations centers in network ismonitored The the infrastructure. terms ofourown share of networks intheworld in one ofthelargest IP-based “The Viking Network is 33 TELIA 2000 BUSINESS SOLUTIONS

Moving customers up to the IP platform

Business Solutions works with a complete range of telecom and IT products that can be combined and integrated for solutions that support companies and their business development. Today’s devel- opment is shifting from primarily fixed services to a combination of mobile services integrated on the IP platform.

Business Solutions offers a broad and complete range of basic and providers of integrated solutions with increasing focus on IT. The premium services in fixed telephony, data communications, mobile objective is to significantly increase the business area’s share of solutions and Internet.The basic components are used for creating its customers’ IT budgets – by being the best at helping them both standardized systems and more customized solutions. The enter the new networked world and making their IT management business area is also well positioned on the emerging ICT market more cost-effective. Another objective is to strengthen Business (Information Communication Technology), which entails total Solutions’ position in the SME segment (small and medium-sized responsibility for integrated IT and communications solutions, enterprises). including hardware and applications. The major business opportunities lie in showing customers Although Business Solutions’ main market is Sweden, the busi- how new solutions can yield greater benefit and improve their ness area also has operations in Denmark and Finland as well as the competitive power by means of new functionality and more U.K. and Spain to a lesser extent. This business area also manages effective communications. This can be realized by moving from Telia’s shares in several operator companies in the Baltic region. mainly fixed services to a combination of fixed and mobile serv- On the Swedish business market, Business Solutions is the ices, which reflects and even anticipates the development of cus- largest player with respect to both fixed and mobile telephony as tomer needs. well as data communications traffic.The business area is also by far the largest supplier of IP solutions and broadband solutions and The cornerstone of Business Solutions’ strategy is to already delivers a variety of broadband solutions to most of its larg- • Safeguard Telia’s position regarding current high-volume services er business customers. in fixed telephony and data communications; Fixed telephony represents 50 percent of Business Solutions’ • Offer new superior functionality by integrating voice and data revenues. This product area is highly competitive with deeply communications as well as fixed and mobile communications slashed prices in recent years. However, the basic fixed telephony based on IP; business reports strong profitability and the business area has a rel- • Focus on the Swedish market and offer customers global reach; atively stable market position. • Develop new volume services as an ASP (Application Service Provider) as well as in outsourcing, hosting and workstation serv- Strategic focus ices, among others; The goal of the business area is to consolidate market leadership •Streamline and fine-tune existing operations by increasing the on the Swedish business market and become one of the leading efficiency of work processes and market cultivation, while improving customer service and interaction.

Business Solutions Business Area, Facts & Figures Healthy growth in telecom-related IT services The market for basic telephony services to Swedish businesses con- Role in the Group: Responsible for tinues to experience increased competition, while demand for tele- packaging and integrating its own and the Group’s services and products. com-related IT services is surging. Business Solutions’ strong mar- Customer segments: Businesses and orga- ket position and broad expertise in Internet and mobile tech- nizations in Sweden, Denmark and Finland. nologies lay a solid foundation for participating in the powerful Net sales: MSEK 15,531 expansion of telecom-related IT on the business market. Underlying EBITDA: MSEK 1,171 Operating income: MSEK 1,602 Five benefit areas to satisfy customer needs TELIA 2000 Business Area Head At the core of Business Solutions’ operations is its complete range Anders Gylder Number of employees: 4,586 34 of telecom and IT products that can be combined and integrated BUSINESS SOLUTIONS

Centrex – the PBX that is always state-of-the-art “The advantages are clear,” says Per Näslund. “Not only are we free from investing in traditional PBX equipment, but Centrex also makes the PBX always available, regardless of our location.” Per Näslund is in charge of telecommunications at Fören- ingsSparbanken. This bank has had a subscription for Telia’s net- work-based PBX since December 2000 and has begun rolling out the solution at its smaller branches. Centrex 2000 is based on an IP platform and is a revo- lutionary breakthrough – a software PBX instead of hard- ware. In principle, Centrex is a computer program. “We have a functional agreement with Telia,” explains Per Näslund. “We purchase several functions that we deem to be important, and we are then able to add functions and cancel others. The goal is to find a common base functionality that we can implement nationwide.” Centrex is available in Telia’s network and the service can be customized to each company’s specific needs. Centrex supports all existing forms of con- nection – DECT, GSM, ISDN and the local IP network. It can also be connected to the company’s existing PBX and provide all existing extensions with the same easy-to- use switchboard functions. It doesn’t matter where the company’s employees are or the type of phones they use, all switchboard functions are available at the touch of a button. And calls can be forwarded to a mobile phone anywhere a network is in place. Since Centrex can be reprogrammed, it is always state-of-the-art. New technologies and functions introduced on the market can easily be integrat- ed into Centrex. There is no risk that the company will outgrow the PBX since the capacity can always be adapted up or down. “The flexibility and scalability are clearly great advantages,” says Per Näslund. “When Telia develops new functions, we will definitely be interested.”

into flexible solutions that support companies and their business • Communication with suppliers and customers – solutions in e- development. The concept is that the customer chooses benefit commerce, interactive voice response, extranets and e-mail, which before technology, with Telia’s guarantee that the technology support a company’s needs for effective communications with its works. customers and suppliers. The services can be grouped into five benefit areas, which can The business area’s five identified benefit areas are facilitating all be combined with each other in different configurations: rapid growth and compensating for lost revenues due to slashed • Marketplace – all the services that affect communications with telephony rates.This new focus is aimed at considerably raising the our customer’s customers, for example contact centers, own web- value added of the business area. sites and portal solutions, including all the services applicable to The focus requires a continued fast pace in the development of electronic commerce and Internet banking. This area is growing new services based on extensive customer benefit. The business very rapidly. area is establishing strategic partnerships in order to do this at a • Intercompany communications – voice and data separately or reasonable cost. combined in an IP solution, between and within offices. The growth in this area has benefited from the transition to personal IP-based solutions dominate telephony and the migration towards IP solutions. A large proportion of the business area’s customers already have • Outsourcing – more and more companies are choosing to out- broadband communications. Telia’s Business Solutions is the lead- source IT network operations and management to telecommuni- ing supplier of IP and broadband solutions on the Swedish business cations companies in order to be able to focus on their core busi- market in terms of the number of accesses (connections), number nesses. This is a rapidly expanding area. of customers and market share, and offers the entire range in its • Flexible Office – IT and communications tools for employees portfolio, including accesses, corporate networks and applications. working from home or away from the office on business trips, e.g. Business Solutions is making great strides in moving existing mobile services and standardized software available in the cus- services and networks to IP and Business Class IP networks, includ-

tomer’s network. Business Solutions is cultivating collaboration ing accesses and applications with increased security and a higher TELIA 2000 with important partners in this area. service rating. It is estimated that nearly half of the traditional tele- 35 BUSINESS SOLUTIONS

com and datacom business will have migrated to IP within the next suite), solutions for electronic commerce and Internet retailers, e- three years. IP-based solutions already dominate the scene in mail and web applications such as Instant Office, Instant Educa- today’s data communications. tion, Instant File Manager and Instant School.

New functions available via the network Outsourcing – an important target area Business Solutions is currently working on developing its role as an One of the business area’s important target areas is operating and ASP, aiming to make more of Telia’s services and applications avail- maintaining our customers’ communications and IT systems. In able over the Internet.The concept is based on building application order to further enhance its expertise, Telia IT-Service, which spe- “libraries” that the user leases over the Internet, with customers cializes in IT and communications systems, was transferred to paying for the time that the application is used. Demand for this Business Solutions during the year. type of application is expected to become very high as companies Telia’s offers on the outsourcing market include not only system begin working in earnest in business-to-business networks. operation, but also system management, which means that Busi- During the year, Business Solutions laid a platform and began ness Solutions takes responsibility for “Business Solutions’ expan- development work in the ASP segment. Business Solutions has also upgrading the systems as needed. sive customer base is its forged alliances with several strategic partners specialized in busi- strongest asset. Increasing ness and accounting systems. The development of applications is Stronger market position our deliveries to existing focused on making solutions scalable and being able to offer solu- The expansive customer base is the customers is more impor- tant for growth than tions on the international market, for example through licensing. business area’s strongest asset. Busi- winning more customers Current ASP offers include NetApplication Office (MS Office ness Solutions has a total of 58,000 and geographic expansion.”

One number for anywhere access

What if you could have a single, personal telephone number that you could use to call from your mobile phone, PC, multimedia terminal or an ordinary telephone whenever you need, from anywhere? You can! In the summer of 2000, Telia was the first company in the world to sell GSM telephony over IP networks, in the form of BrightOffice – the wireless office. This solution connects data, Internet, mobile and fixed telephony in the same net- work, the company’s local network (LAN). GSM base sta- tions are connected to the local network, providing GSM coverage for local traffic. Fixed telephony can now be moved from PBXs to the local network where both GSM and IP telephony are integrated. The solution also includes support for oper- ator functions. BrightOffice can simplify and streamline communica- tions for companies with employees who frequently work outside the office, creating a more flexible work environ- ment. Outside the office building, the phone works like an ordinary GSM telephone with a WAP browser.This telephone gives the user access to the company’s databases wherever there is GSM coverage. Inside the office, the phone works as a mobile at a flat rate. Telia’s current solution is based on Erics- son’s product GSM on the Net. “Many experts claim that the possibility of GSM over IP will be as revolutionary for busi- ness customers over the next ten years as GSM and the Internet were during the 1990s,” says Pelle Lindvall, responsible for Telia Bright, which is jointly owned by Business Solutions and Mobile. TELIA 2000

36 BUSINESS SOLUTIONS

customers. Several successful marketing activities were carried out very well received on the market and has already been sold to sev- during the year aimed at winning back telephony and Internet cus- eral customers, including the City of Gothenburg (8,500 connec- tomers in the small and medium-sized business segment, who had tions) and the City of Stockholm (17,000 connections). opted for another operator to provide basic telephony, partly in Business Solutions was the first in the world to provide solu- connection with the carrier preselect reform. tions that link local networks and GSM over IP. Several customers Business Solutions concentrates mainly on the Swedish market, are currently testing the service. focusing on offering global communications solutions together The number of Internet accesses rose during the year. Telia with Infonet for customers with international activities. Business Broadband ADSL was launched with transfer speeds up Business Solutions’already strong position in the corporate cus- to 2 Mbps over a company’s ordinary telephone line and with 24/7 tomer segment was further reinforced during the year. Global com- service. munications platforms were delivered to several major Swedish Several new Internet applications were launched, such as Telia companies such as Stora Enso and Sandvik. The network delivered Instant Intranet for building information intranets, and Telia Instant to Stora Enso is an IP-based broadband network that connects Education, a platform for learning in schools and businesses. 15,000 users to 400 locations around the world. Additional services were added to the webhotel service during In Denmark, major efforts have been made during the year to the year, including Telia Dynamic Web, a platform and tool for cre- streamline and improve profitability in telephony, data communi- ating websites with advanced functions and interactivity. cations and Internet. The Danish market demonstrates great simi- Telia Streaming Media, a service for web-based TV- broadcasts larities to the Swedish and the business area expects to be able to – “Internet TV” – has won the respect of leading production com- take a position on the emerging ICT market, though with a more panies and is even used by Sveriges Radio, SVT, ICA, several banks, limited range than in Sweden. AMS and Dagens Industri. Business Solutions also has a focused portfolio of pan-Nordic Business Solutions is the leading provider in the area of contact services for Swedish companies with operations in other Nordic center services. A number of new deals were made during the year. countries. SJ, the Swedish state railways, which has one of Sweden’s largest customer service divisions, signed an agreement with the business More efficient distribution area for the delivery of solutions for managing all of SJ’s incoming Our continuous efforts to raise profitability in the business area telephone calls concerning ticket sales and traffic information, as have included eliminating unprofitable products and modernizing well as supporting SJ’s expansion of its web-based services. business support IT systems. Today’s businesses need to build customer relationships In order to create more efficient distribution, an adjusted organ- through interaction over the Internet. This is why Business Solu- ization with two main sales channels – Telia Partner and Telia Online tions has developed two new services in its e-service offerings; a – was brought into service on 1 January 2001. tool that allows customers to call, chat and send e-mail via the Telia Partner is the channel for company’s website and a system that manages the company’s “Two main sales channels customers who need sophisticat- incoming e-mail effectively and intelligently. – Telia Partner and Telia Online – create a platform ed, customized solutions. This is Telia Reflex, which was launched during the year, lets customers for closer cooperation where customers meet specialists control their telephony usage by viewing invoices, analyzing traffic with customers and a in integration, network solutions, and managing their own subscriptions on the web. Many customers cost-effective, accessible IT, mobile technologies and out- see substantial value added in this tool and the service has con- channel for our standard products.” sourcing. tributed to increasing the business area’s attractiveness as a sup- Telia Online is a cost-effective plier of basic telephony. sales channel that allows customers to quickly and easily order products and services from the standard range and packaged offer- Cooperation with Förenings- “Telia and Förenings- ings anytime, anywhere. Sales are handled via a portal with 24- Sparbanken for e-commerce Sparbanken decided during hour service and self-service capabilities. The demand for electronic commerce the year to cooperate on forming a jointly owned The new sales channels will help customers find exactly the solutions is on the rise in Sweden. company for the develop- Telia product or service that they need. Telia and FöreningsSparbanken ment of e-commerce decided during the year to cooperate solutions.” New services and new functionality on forming a jointly owned compa- Demand for broadband solutions continues to climb.The year 2000 ny, Marakanda, for the development of e-commerce solutions.The saw the development of several IP-based services – both open company will have access to Business Solutions’ established plat- Internet-based and more company-specific solutions such as virtu- form and customer base and FöreningsSparbanken will contribute al private networks over IP.The PlaNet service was launched during its financial expertise, strong local anchoring and knowledge of the year, which is a total broadband solution for small and medi- Internet banking. um-sized businesses that want to connect their offices in one shared network with transfer speeds up to 100 Mbps. The market reception has been very positive. A new Centrex platform was developed during the year. The solution, which is a network based exchange with integrated tele- TELIA 2000 com, mobile and IP-based communications capabilities, has been 37 PEOPLE SOLUTIONS

More affordable basic telephony and new services

Customers are migrating from narrowband to broadband. During the year, People Solutions launched a service based on ADSL technology, which gives consumers unique opportunities for obtaining broadband. At the same time, several broadband services were launched on the website startsidan.telia.se, which is the starting point for a new multi-portal aimed at the Swedish consumer market. As competition on the market is becoming more concentrated on winning profitable customers, the business area is focusing more on “customer share.”

The People Solutions business area offers fixed telephony, Internet, Goals and strategies “Our objective is to broadband access and information services.The business area aims The business area’s goals and strategies quickly establish a to be a full-service supplier to private individuals and small busi- are to: position and promote the development of ness customers with attractive offerings and good service adapted • Maintain the leading market position in broadband on the to customer demands at competitive prices. voice telephony in Sweden in selected Swedish consumer People Solutions has three strategically important roles in the segments by encouraging customers to market.” Group – as an important promoter of the Telia brand in Sweden and use Telia for a greater part of their tele- Denmark, as a supplier of Telia’s comprehensive product portfolio com consumption, thereby increasing the customer share; to the consumer and small business market, and as a platform for • Be the leading supplier of broadband services and Internet traffic building a strong business position in the new “e-world.” A new to Swedish households by being first to market with a wide range multi-portal with a continuously growing share of broadband ser- of access products and content services; vices will play a central role in this development. • Attract customers to move to broadband through the initiative to Growth is driven by technological development, which is mov- make a third generation multi-portal available to the Swedish ing from dial-up Internet (PSTN and ISDN) to broadband (ADSL consumer market; and LAN). With its large customer base, Telia has both unique • Secure good profitability in the business through continuous opportunities and a special responsibility to influence this devel- improvements, streamlining, and effective marketing channels. opment while ensuring that real value is continuously created for customers. Focus on customer share People Solutions’ main market is in Sweden, where the business The People Solutions business area has a very large customer base area leads the market for fixed telephony and dial-up Internet – 4.4 million telephony subscriptions in Sweden. As the market access (PSTN and ISDN) as well as broadband. The business area becomes more concentrated on winning profitable customers, the also holds a strong position on the consumer market in Denmark as business area is focusing more on “customer share” while working the second leading company for fixed telephony, Internet and cable to maintain its market shares. TV.The business area has operations in Finland and on the cable TV There are currently approximately 1.4 million Swedish cus- markets in the Baltic states and Russia via associated companies. tomers who have at least three different subscriptions (fixed, mobile and Internet). Of these, only 25 percent have bundled their subscriptions with one individual operator. This means that there People Solutions Business Area, Facts & Figures are great opportunities for increasing customer share in a substan- tial part of the customer base, thereby boosting the share of prof- Role in the Group: Responsible for itable customers. The tools to do this include the loyalty program packaging and integrating its own and the Telia Advantage (Telia Fördel), which has quickly become a great Group’s services and products. success, along with expanded product and service packages. Customer segments: Private consumers In order to streamline its marketing, People Solutions is divid- and small businesses in Sweden and ing the market into five main segments. During the year, the busi- Denmark. ness area promoted a number of successful offers targeted at spe- Net sales: MSEK 18,337 cific customer groups, such as Internet offers to young consumers Underlying EBITDA: MSEK 855 and offers to small-business owners for ISDN upgrades and Telia Business Area Head Operating income: MSEK 1,288 Jan Rudberg Instant Web. TELIA 2000 Number of employees: 4,562 38 PEOPLE SOLUTIONS

Information and entertain- ment “on demand”!

Play wacky jungle tennis! Or race against Schumacher in your own Ferrari through the streets of Monte Carlo! Broadband will have greater impact on everyday life in 2001, especially when the People Solutions busi- ness area launches its multi-portal in the early spring. The multi-portal is a very broad initiative aimed at making life simpler and more enjoyable for all con- sumers. The most popular action, sports and adventure games will be available for customers.The goal of a multi- portal is to be personal, i.e. to reflect the user’s interests. A multi-portal is integrated by connecting different suppli- ers and services and can be accessed via PC, TV, mobile phone and PDA. Broadband is a general term for high speed connections that enable potent combinations of audio, video and interactive appli- cations. Several broadband services were launched at the end of 2000 for sports, games, news, entertainment and music on Telia’s upgraded start page. Telia was the first company in the world to offer Games on Demand – games played on the Internet, paid for per use. This service, launched in the spring of 2000, is only available to customers with broadband connections. A special invoice has been developed for the service that can be used in the future for handling Telia’s and other suppliers’ micropayments various types of services. Some of the other partners that Telia has signed agree- on the multi-portal. ments with include Barracuda (entertainment), Bonniers, Disney, FunPlanet Games on Demand is a service developed by Telia together with (games), TT and Warner Music. Microsoft and the Swedish company Vision Park and is based on a plat- During 2001, broadband connections will become a more important part of form from Exent. Games are supplied by companies such as Electronic Arts – the everyday life in Swedish homes. Telia’s early spring launch of its multi-portal is world’s largest vendor of interactive games. just the first step on a journey of new services and new opportunities to be devel- The portal will offer the most attractive content on the market by expanding oped. The goal is to make life a little simpler and more enjoyable for all of Telia’s its range of services in close cooperation with leading providers of information and Internet customers.

A fast-paced market highly developed with some 60 operators in fixed telephony, The Swedish communications market is growing in value, despite approximately 20 Internet operators and 15 broadband suppliers. falling prices. Access-neutral and traditional mobile services are the This has led to very competitive pricing. Telia’s price adjustments fastest growing segments. New mobile services and products for in 2000, however, have made it more difficult for the market to broadband access, for example cable TV, ADSL, LAN and various focus on price alone and more players are now starting to set them- radio-based solutions, are expected to yield positive growth in selves apart with a combination of service, brand, individual offers coming years. At the same time, the number of subscriptions per and bonus clubs. household is on the rise, which also contributes to growth. On the Internet market, we will see a shift to different forms of A new consumption pattern is developing on the Swedish mar- broadband access such as cable TV, ADSL and LAN solutions in ket today. An increasing part of fixed telephony is being replaced coming years.The development will be gradual, which in the short- with mobile communications and e-mail.As a result, revenues from term means that there will be a continued market for dial-up Inter- fixed voice telephony are on the decline while the total market for net services. communications is growing. This gives Telia great opportunities to expand its business and secure customer relationships by moving Sweden and Denmark positioned for broadband customers from fixed voice telephony to new services in mobile According to analysts (Forrester Research), the Swedish and Dan- communications and Internet with more broadband features. ish markets are the best positioned countries for a rapid introduc- TELIA 2000 Competition on the household consumer market in Sweden is tion of household broadband. The demand for broadband from 39 PEOPLE SOLUTIONS

Swedish households is already significant. Telia has general agree- SEK 10. These price changes have made Telia more competitive ments in place for connecting a total of 822,000 customers. and have enabled Sweden to strengthen its position among the Broadband, dial-up Internet, and content services are in a European countries with the absolute lowest rates. dynamic stage of development, which requires a focused organi- The major carrier preselect reform was implemented in Sweden zation. To streamline operations, the business area’s resources in the fall of 1999. Those customers who did not select an opera- in broadband, Internet and content services were unified in a tor at that time remained customers of Telia. In order to promote special company,Telia e-bolaget.The company launched an indi- customer loyalty, People Solutions commissioned a series of ad vidual broadband service based on ADSL during the year. ADSL campaigns and mailings in 2000 in an effort to convince as many technology provides unique opportunities for individual con- customers as possible to actively choose Telia. sumers to obtain broadband by upgrading ordinary copper wire to broadband. Cable TV – strong offering outside Sweden At the same time, a number of broadband services were devel- Telia has two wholly owned cable TV companies in Denmark, Telia oped and introduced on the market, for example Games on Stofa A/S and Jydsk Central Antenne A/S. Telia Stofa upgraded its Demand, Nyhetskanalen (TT news service adapted to customer network for broadband and began to offer high speed Internet to preferences; voice, text, video), Nöjesnytt (including music, film customers in 2000. No decision has been made, however, on exten- and fashion), Musikkanalen (a selection of current music videos sive initiatives in broadband in Denmark. from Warner Music Sweden AB) and Hockeyrinken (ice hockey The 60 percent participating interest in the Estonian cable TV game, video clips from professional play, expert commentators, company Starman Kaabeltelevisiooni was divested during the year. player information, etc.). Telia became a shareholder in 1996 and since then the company The services were launched on www.startsidan.telia.se, which is has reported very favorable progress. the starting point for the coming multi-portal to be launched at the The cable TV company Telia MultiCom in Latvia, of which Telia end of the first quarter of 2001. The number of visitors jumped by controls 49 percent, doubled its total number of customers during 50 percent to more than 515,000 when the new portal services the year. MultiCom also offers high speed Internet. were introduced. During the year,Telia acquired 65 percent of the cable TV com- pany Telix in St. Petersburg. The company is building a state-of- Simplified price structure, lower prices the-art cable TV network that is adapted to interactive broadband During the year,People Solutions slashed its prices,simplified its price services. structure and streamlined its range of discount plans. In mid-Febru- During the year, People Solutions took over the responsibility ary, a single local rate was introduced for for Telia’s stake in Scandinavia Online (SOL), which manages a net- “People Solutions all domestic calls in Sweden.This means work of portals in the Nordic countries. has very competitive that customers can now make an 80- offerings after the price adjustments minute long call from anywhere in Swe- Reduction of emissions to the environment made in 2000.” den for less than SEK 10. People Solutions consistently focused on TeleMöte teleconferenc- In August, international rates were ing and NetMeeting in order to minimize travel and the consequent cut by 50 percent on average while the number of price classes was pollution of the environment. This resulted in reduced travel costs reduced from 22 to nine. A ten-minute call to the U.S. costs only by MSEK 10-15 during a period of six months.

Customer advantage

Telia Advantage is the Group’s loyalty program for high-volume private consumers. This program was launched in April 1999 and quickly attracted a large number of members. The program rewards high-volume consumers and those who use several Telia services. Customers accumulate points on all of their traffic – fixed, mobile and Internet. Points can be traded for Telia products (such as refill cards or tele- phones) or various types of events (such as movie tickets or travel). A third category that has become very popular is to make a donation to the Red Cross. Points are “exchanged” for money and Telia matches the contribution. Telia Advantage customers also receive attractive targeted offers and access to a special customer service.The Advantage loyalty program promotes the devel- opment of total customers and increased customer share. TELIA 2000

40 PEOPLE SOLUTIONS

Faster, cheaper, easier, more convenient!

Several new services were launched during the year, in addition to broadband services:

Voice-activated call connection As a complement to the automatic call connection service, a pilot test was initiated during the year for voice-activated call connection in certain geographical areas.When calling a number that has been changed with new number information pro- vided, the caller may automatically connect to the new number by answering “yes”at the voice-prompt. This service will be implemented nationwide fol- lowing the evaluation. There is a trend toward more voice-activated functions in the future and Telia has developed one of Sweden’s most sophisticated voice-acti- vated platforms for taking a leading position in this area.

Low price telephony Telia Mikrosamtal is Telia’s low price offering within fixed telepho- ny for international calls. Calls normally go over IP (Internet Proto- col) which means that the quality may be somewhat lower than that of ordinary telephony. This service is attractive for price-conscious customers and those who make many international calls.These calls are made from an ordinary telephone. The service was launched during the second quarter and was received positively.

Faster Internet In the middle of the year, Duocom customers were invited to supplement their subscriptions with an additional 64 kbps channel for Telia’s Internet con- nection, which means that they can surf the Internet at double the speed (128 kbps).

Message indicator for TeleSvar voicemail A message indicator was added to the voicemail service TeleSvar that alerts the user when there is a new message.There are two variations of the mes- sage indicator, either as an indicator on the caller ID or as a distinct dial tone.

Telia Instant Web Telia Instant Web was launched during the year. This is an applica- tion that allows the customer to build his or her own website directly on the Internet. This service is aimed primarily at small businesses and organizations.

Telia e-mail notification Telia launched its e-mail notification service for immediate notifi- cation of new e-mail messages on caller ID or mobile phones. TELIA 2000

41 42 TELIA 2000 ENTERPRISES the Danish Telia System and Service, and parts of and parts the Danish Telia’sTelia remaining System and Service, Starman Svefo,TeliaKaabeltelevisiooni, Smålandsbörsen, Academy, company, good IN Konferens, Telia Kompetens, Telia Contracting, International. IT & Innovation Support Services & and Retail, Systems & Support, InfoMedia, Services, Financial areas: operational six into grouped aged by Telia Equity. Group’spanies.The other financial commitments will also be man- shareholdings that Telia has decided to retain in the divested com- minority the refine and develop further will Equity) (Telia prises then transferred toanotherbusinessarea. nies that will remain within the Telia Group will be restructured and The compa- or by building new companiestogether withpartners. exchange, stock the on bylisting thereof, parts companyentireor have greater value development potentialoutsideof to Telia. deemed were and business core Group’s the to nected con- not were companies The companies. 27 of total area’s ness busi- the of 22 – partially whollyor – divest to year the during ed As a part it of wasthe Group’sarea. decid- operational fine-tuning, business one than more for support as function that companies and companiesthatneedrestructuring, companies tobedivested, companies; of types different three of comprised is Enterprises nepie uiesAe,Facts &Figures Enterprises Business Area, h olwn opne eedvse uigteya:Telia year: the during divested were companies following The were 2000 in area business Enterprises the in companies The Enter- When thecurrent refine andfocus strategy iscomplete, the selling by ways; various in executed were divestitures The Anders Bruse Business Area Head that TeliaTelia Equity. hasdecidedtoretain indivested companies, developwill acttofurther andrefine theGroup’s financialinterests andtheminority shareholdings theEnterprises businessarea When theongoing Group refine andfocus strategy hasbeencompleted, Successful divestments andrestructuring Number ofemployees: Operating income: Underlying EBITDA: Net sales: businesses. operations outsidetheGroup’s core Role intheGroup: MSEK 22,565 Responsible for MSEK 5,373 MSEK 1,760 13,755 holds hadbroadband connections. connections for a total of 346,000 households and 193,000 house- broadband forowners property with agreements signed had hem com At the end of the year, burg. Gothen- in apartments 67,000 company’s the for connections the broadband for Group Framtiden with agreements signed services for TV andPC. interactive other and Internet for platforms technical of opment made broadband major market, strides during the the year on in the player devel- a to distributor TV traditional a from restructured well ascable TV operations. as InfoMedia includes directory assistance and call center services, ucts andbusinesspersonal insurances withintheGroup. divested.Telia Försäkring’s offerings include insurance for Telia prod-partially or wholly be probably will companies other while Group belong to FörsäkringFinancial will Services,Telia be kept within the that companies the Of products. IT and telecom for solutions ing Financial Services has a broad range of payment services and financ- holding totals49.1percent afterthelisting. Telia’sshare- 6,020. MSEK totaled gains capital and sale, the from 6,114 MSEK Teliareceived share. per 84 SEK at set was price IPO The Eniro. in capital the of percent 50.1 representing issued, were totalof75,150,000shares A Exchange inOctober. OM Stockholm Telia Trading. as well as Combinatorcompanywassold, consulting the 2001, of beginning the In ADC and year. the during sold Online also wereCommunications Egmont in Participations holdings. estate real works and exchanges) and offers installation and support (net- services. solutions communications CPE offers Support & Systems Systems &Support com During hem the summer, being is which AB, hem com business TV cable Swedish The InfoMedia Financial Services the of list O the on listed was AB Eniro business directory The totaled MSEK6,020.” capital inEniro andcapitalgains representing 50.1percent ofthe 75,150,000 shares were issued, Atotalof during theyear. was exchange listedonthestock “The directory businessEniro AB ENTERPRISES

Telia is IN good company

During the year,Telia started a joint company for business support services together with WM- data and the insurance companies If and Skandia.Telia contributed IN good company AB (600 people) while Skandia/If contributed the support company Ackuratess Administration AB (250 people) to the new company.WM-data contributed support services in WM-data Företagsservice AB (150 people). The new company, which is doing business as IN Ackuratess, already offers a wide range of services in office services, personnel services, accounting services, payment services, payroll administration, teleph- ony services and archiving and documentation services. IT is a signifi- cant part of the service offering, both as an integrated part of the serv- ices and as consulting. “Spin-offs mean that we can focus more on our core business while gain- ing access to needed business support services in the new company,” explains Bo Gustavsson, Telia’s representative on the new company’s board of directors. Gustavsson anticipates that the company will yield a return and be a good financial investment for the partners.Telia and WM-data each own one third of the company while If and Skandia each own one sixth. “We expect to be able to take a strong position on the growing market for business support services in Sweden, but will also support our customers in their international operations,” says Kristian Rothoff, president of the new company. Rothoff was previously president of the staffing company, Olsten Sverige. He explains that the shareholder base of the company may be expanded even further. In 1996,Telia established a special company,Telia Assist, for large parts of the administrative support services. At the same time, new procurement procedures were initiated in order to streamline operations and increase cost-consciousness within the Telia Group.The company later changed its name to IN good company. At the time of the merger, IN good company had 10 percent of its sales from customers outside Telia.

“At the end of the year, Telia IT-Service was transferred to companies. Telia Handel is responsible for Telia’s sales via external com hem had signed Business Solutions during the year in resellers while Telia Fastigheter owns and manages Telia’s real agreements with property owners for order to strengthen that business estate properties, most of which comprise technical facilities. Dur- broadband connections area’s competence in operation and ing the year, Tändstickspalatset (“the Match Palace”) in central for a total of 346,000 maintenance of IT installations for Stockholm was sold, among other holdings. households and 193,000 business customers. households had broad- band connections.” Swedia Networks, a company IT & Innovation specialized in setting up and main- Within IT & Innovation, all operations will be divested, with the taining networks, signed a general agreement during the year exception of the research and development company Telia Research with Bredbandsbolaget to establish 500,000 broadband connec- and the venture capital company Telia Business Innovation. tions in Sweden and Norway. An agreement was signed with the Telia Business Innovation (TBI), which invests venture capital in carrier Storm for installation and maintenance of Storm’s net- unlisted companies in growth areas, divested its participating inter- work in Europe. est in Altitun to ADC Telecommunications AB during the year. Telia Nätservice became an independent company called Neterna.The company is specialized in operating and maintaining International fiber-optic cable. A major deal was finalized with parties includ- Most of the investments in International are financial in nature and ing Stockholm Transport. are aimed at generating value for Telia, which means that these Telia Företagsservice and Telia Installation also became inde- investments are divested in the short to medium term. pendent companies and Telia Företagsservice changed its name to Telia Overseas, in which Telia has a 65 percent stake, primarily Relacom at the beginning of 2001. Relacom offers communica- invests in mobile operations in growth regions, mainly in Asia, Africa tions solutions services based on IT and telecom products. Telia and South America. Mobile operators are currently in a relatively Installation delivered a large number of broadband installations early stage of development and have shown strong customer growth during the year. during the year. A Letter of Intent was signed in early 2001 on the sale of the mobile operator Tess in Brazil to Telecom Americas. Support Services & Retail

Within Support Services & Retail,Telia Handel and Telia Fastigheter TELIA 2000 will be kept within the Group, but divestiture is planned for all other 43 BOARD OF DIRECTORS

Carl Bennet Lars-Eric Petersson

Jan-Åke Kark Birgitta Johansson-Hedberg

Lars-Eric Petersson Birgitta Johansson-Hedberg Ingvar Carlsson Chairman of the Board. Elected to the Board Elected to the Board of Telia AB in 1993. Elected to the Board of Telia AB in 2000. of Telia AB in 2000. President and CEO of President and CEO of FöreningsSparbanken. Former Prime Minister. Chairman of the Board Skandia. Chairman of the National Agency Member of the board of Förenings- of the Swedish Foundation for Strategic for Higher Education. Born 1950. Sparbanken. Chairman of the boards of Research and the Swedish Concert Institute. Number of shares in Telia: 4,800 Lindex and Knowledge World. Born 1947. Born 1934. Number of shares in Telia: 500 Number of shares in Telia: 400 Carl Bennet Elected to the Board of Telia AB in 2000. Anders Igel Jan-Åke Kark Chairman of the boards of Elanders AB, Elected to the Board of Telia AB in 1999. Elected to the Board of Telia AB in 1999. Getinge Industrier AB, Halmstad University, President and CEO of Esselte. Member of the Member of the boards of Telia Nära AB, Telia Lifco AB, Scanrec AB and Sorb Industri AB. board of Esselte AB. Born 1951. Mobile AB and the Federation of Swedish Member of the boards of AMS and SNS, Cen- Number of shares in Telia: 0 Industries. Chairman of the boards of Göte- ter for Business and Policy Studies. Born 1951. borg University and the Invest in Sweden

TELIA 2000 Number of shares in Telia: 10,500 (through Agency. Member of the Royal Swedish 44 companies) Academy of Engineering Sciences, Section XI (Research and Training). Born 1946. Number of shares in Telia: 2,250 BOARD OF DIRECTORS

Anders Igel Ingvar Carlsson Berith Westman

Ronny Käck Elof Isaksson

Ronny Käck Elof Isaksson Deputy members Employee Representative. Elected to the Employee Representative. Elected to the Anders Boman Board of Telia AB in 1995. Chairman of the Board of Telia AB in 2000.Vice Chairman of Employee Representative. Union of Service and Communication the Union of Service and Communication SEKO TELE. Employees, support and communications Employees, support and communications Number of shares in Telia: 100 (SEKO TELE). Member of the board of Telia (SEKO TELE). Member of the board of Telia Pension Fund. Born 1944. Mobile AB. Born 1942. Christer André Number of shares in Telia: 0 Number of shares in Telia: 550 Employee Representative. SEKO TELE. Berith Westman Number of shares in Telia: 352 Employee Representative. Elected to the Board of Telia AB in 1993. Chairman of the Gösta Mölleby Swedish Union of Clerical and Technical Employee Representative. Employees in Industry, telecommunications SIF-TELE. section (SIF-TELE). Member of the boards of Number of shares in Telia: 450 TELIA 2000 Telia Swedtel AB and Telia Pension Fund. 45 Born 1945. Number of shares in Telia: 550 GROUP EXECUTIVE MANAGEMENT

Marianne Nivert Jan Rudberg

Lars Härenstam Kenneth Karlberg

Marianne Nivert Microwave Systems. Has served as human of Group executive management since 2000. President and Chief Executive Officer. resources director at Sandvik Coromant, Previously active as efficiency director and Employed by Telia since 1963, member of Sandvik Tooling, Volvo (Cars and Penta) and head of network development in the Gothen- Group executive management since 1995. Stena Line. Born 1949. burg telecom district and telecom region Previously head of the Carrier & Networks Number of shares in T elia: 2,550 West. Born 1944. Business Area, Gothenburg telecom district Number of shares in Telia: 350 and telecom region East. Born 1940. Bo Jacobsson Number of shares in Telia: 2,150 Executive Vice President and Chief Financial Kenneth Karlberg Officer. Employed by Telia and member of Senior Executive Vice President and head of Lars Härenstam Group executive management since 2000. the Mobile business area. Employed by Telia Executive Vice President and head of Corpo- Previously CFO at Trelleborg AB and presi- since 1987, member of Group executive rate Development and Human Resources. dent of Scancem AB. Born 1951. management since 1999. Active in mobile Employed by Telia and member of Group Number of shares in Telia: 600 communications since 1995, first as regional executive management since 1999. Previous- head and product manager, subsequently as ly responsible for compensation and benefits Lars-Gunnar Johansson business area head and president of Telia TELIA 2000 within the Ericsson group, also personnel and Head of the Carrier & Networks business Mobile. Born 1954. 46 corporate communications director, Ericsson area. Employed by Telia since 1969, member Number of shares in Telia: 1,400 GROUP EXECUTIVE MANAGEMENT

Emanuela Pedrocco Bo Jacobsson

Lars-Gunnar Johansson Michael Kongstad

Michael Kongstad Born 1969. Senior Vice President and head of Corporate Number of shares in Telia: 1,950 Communications. Employed by Telia and member of Group executive management Jan Rudberg since 2001. Previously president of Burson- Executive Vice President and head of the Marsteller’s Swedish operations and commu- People Solutions business area. Employed by nications director for Posten AB, WASA Telia in 1994 and member of Group execu- Försäkring and OM Gruppen. Born 1960. tive management since 1999. Previously Number of shares in Telia: O president of Tele2, vice president of Nord- banken, president of Enator and head of Emanuela Pedrocco Nordic operations, Ericsson Information Marketing Director, Skills Market. Employed Systems, Sweden. Born 1945. by Telia since 1996, member of Group Number of shares in Telia: 2,000 executive management since 2000. Previous- ly worked with business development at Telia Handel, as an international product manager TELIA 2000 and sales manager for Italy at Allgon Mobile. 47 48 TELIA 2000 HOW TO REACH TELIA -al [email protected] E-mail: 8-4669990 +46(0) Fax: 8-5665500 +46(0) Telephone: Sweden StrandSE-131 90Nacka Fabrikörvägen 8 Telia AB Anders Gylder Business Area Head Business Solutions [email protected] E-mail: 8-9476 83 +46(0) Fax: 8-7131000 +46(0) Telephone: Sweden SE-123 86Farsta Telia AB Lars-Gunnar Johansson Business Area Head Carrier &Networks [email protected] E-mail: 8-60197 58 +46(0) Fax: 8-90300 +46(0) Telephone: Sweden StrandSE-131 86Nacka Augustendalsvägen 7 Telia AB Kenneth Karlberg Business Area Head Mobile [email protected] E-mail: 8-71333 +46(0) Fax: 8-7131000 +46(0) Telephone: Sweden SE-123 86Farsta Telia AB Marianne Nivert President andCEO How toReach Telia -al [email protected] E-mail: 8-7136997 +46(0) Fax: 8-7131000 +46(0) Telephone: Sweden SE-123 86Farsta Telia AB KongstadMichael Communications Director Corporate Communications [email protected] E-mail: 8-71369 47 +46(0) Fax: 8-7131000 +46(0) Telephone: Sweden SE-123 86Farsta Telia AB Tobias Lennér Director Investor Relations [email protected] E-mail: 8-70752 90 +46(0) Fax: 8-7076500 +46(0) Telephone: Sweden SE-136 80Haninge Rudsjöterrassen 2 Telia AB Anders Bruse Business Area Head Enterprises [email protected] E-mail: 31-298752 +46(0) Fax: 8-7131000 +46(0) Telephone: Sweden SE-123 86Farsta Telia AB Jan Rudberg Business Area Head People Solutions GLOSSARY

2001 Annual General Meeting Glossary

ADSL: Asymmetrical digital subscriber line, a tech- ISDN: Integrated services digital network, a digital Telia’s Annual General Meeting will be held on Thursday, 10 Nominees provide assistance with the registration, usual- nology that expands the bandwidth on copper- network that provides numerous services for voice, based telephone lines to a maximum 6 Mbps, corre- text, data, and images. May 2001 at 4:00 p.m. at the Globe Arena in Stockholm. ly for a modest fee. sponding to audio and video quality in television today.The bandwidths are different (asymmetrical) LAN: Local area network, a computer network in the different directions (to and from the user). installed on the user’s premises in a limited space. Right to participate in the Annual General Meeting Notice of intention to attend ASP: Application service provider, supplier of soft- MISP: Mobile Internet service provider, a supplier of Shareholders who meet the following criteria are entitled Notice can be given: ware and related services, usually distributed over services via mobile Internet. to attend Telia’s AGM: • by phone: +46 (0) 8-470 81 20 the Internet. NMT: Nordic mobile telephony system, an analog • entered on Telia’s register of shareholders as per Monday, • by mail: Telia AB, Box 999, SE-171 74 Solna, Sweden ATM: Asynchronous transfer mode, a technique mobile telephony system that was developed by 30 April 2001 • on Telia’s website: www.telia.com/agm that allows switched, flexible bandwidth and gives the Nordic public telecommunications utilities. users access to the bandwidth they require for each • and having notified Telia of their intention to attend not particular service. POP: Point of presence, a location where customers later than 4:00 p.m. on Friday, 4 May 2001. In providing such notice, shareholders should state: can connect to the Viking Network. Centrex: Switchboard function in the public teleph- • name ony network. SDH: Synchronous digital hierarchy, a method for Registration procedure • social security/corporate registration number bundling packets of information and transporting Churn: Propensity of customers to change opera- the bundles. The method is based on international Telia’s register of shareholders is maintained by VPC AB. • telephone number tors. standards and increases the capacity in existing fiber-optic networks. Stock may be registered either in the shareholder’s name • number of accompanying persons Churn rate: Customer turnover, that is, the propor- or in the name of a nominee. tion of customers who have switched to competing Server: A computer in the network that stores and operators. processes information for other computers. To attend the meeting, shareholders whose stock has Payment of dividend been registered in the names of nominees must arrange Tuesday, 15 May 2001 is proposed as the record date for CTI: Computer-telephony integration, combination Service provider: Supplier of services, often to the of telephony and computing on terminals and net- end-customer. for their shares to be re-registered in their own names at the right to receive dividends.Dividends are expected to works. VPC not later than Monday, 30 April 2001. be distributed by VPC on Friday, 18 May 2001. SMS: Short message service, a service for transfer- DOF: Department of the Future, Telia’s brand for ring text messages between mobile phones. advanced services, mainly mobile. UMTS: Universal mobile telecommunications sys- Dematerialization: Replacing a physical product tems, the next generation of digital mobile commu- with a network-based service. nications system after GSM.They can handle voice, Financial Information text, data, and images. Financial information GPRS: General packet radio service, a data service for GSM that makes it possible to surf the Internet Unified messaging: A common mailbox on the Annual General Meeting 10 May and send e-mail at transfer rates up to 115 kbps. Internet for voicemail, fax, and e-mail. at www.telia.com Interim Report January–March 10 May Interim Report January–June 16 August GSM: Global System for Mobile Communication, a VNO: Virtual network operator, supplier of services Interim Report January–September 7 November digital mobile telephony system based on a global that are delivered over other operators’ networks. Financial information is available from our homepage standard. GSM 900 works in the 900 MHz fre- Telia’s financial reports are produced by Telia AB, Investor Relations. quency range, GSM 1800 in the 1800 MHz range. VOIP:Voice over Internet protocol, voice communi- www.telia.com, Investor Relations. cation over packet-switched networks, principally Interim reports and annual reports are posted on our HSCDS: High speed circuit digital system, a techni- the Internet. cal solution for mobile data communications that Please direct questions Reports may be ordered via: homepage as soon as they are published and press con- allows the transfer of fax, e-mail, files, and text VPN: Virtual private network, a private corporate regarding content to: ferences are broadcast “live”via the Internet when reports Tel.+46(0)8-7137143 messages with transfer rates up to 64 kbps. network set up in the public network. Telia AB, Investor Relations Fax +46 (0) 8-604 54 72 are presented. Internet: The Internet is a large number of local, WAN: In contrast to a LAN, a wide area network SE-123 86 Farsta, Sweden Online at www.telia.com, independent computer networks that are linked extends beyond the structure of a company via Tel.+46(0)8-7131000 You can also follow Telia’s share price and view all press Investor Relations. using standardized protocols to form a worldwide public or leased lines to other LANs in other build- Fax +46 (0) 8-713 69 47 releases at www.telia.com. network. ings or in other locations. Online at www.telia.com, New shareholders who are registered directly may Investor Relations. Intranet: Private network in a company or other WAP: Wireless application protocol, a protocol that choose to have published reports sent to home addresses. organization that is based on the same protocols as makes it easier for mobile users to access their e- the (public) Internet but is intended for in-house mail and voicemail, send and receive faxes, trade use. stock and do bank errands, and view web pages in small format. Telia’s Operating and Strategic Review for 2000. This is a description of Telia’s IP: Internet protocol, a suite of protocols that helps strategic focus and initiatives during the year for realizing our goals and visions. data networks communicate with one another. Web hosting: A service by which an Internet service Telia’s Annual Report for 2000 is also available, including the report of the provider offers to set up and store customers’ web TELIA 2000 Board of Directors, income statements, balance sheets, performance analyses, pages on computers connected to the Internet and auditors’ report, etc. If the Annual Report is not included in this document, it can owned by the ISP. 49 be ordered by calling +46 (0) 8-713 71 43. NLT 0 84R Pouto:TlaA n nelcaCroaeA.nls rnlto:ItrebmSrkjntA.rnig Du TeliaEN/LZTA Interverbum Språktjänst 802 2884 R1 Production: AB and Intellecta CorporateAB.Printing: AB.English translation: Telia 2000 ro Grafiska.Printed on environmentally approved paper.

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Telia 2000

Telia AB (publ) Investor Relations SE-123 86 Farsta, Sweden Tel.+46 (0) 8-713 10 00 Fax +46 (0) 8-713 69 47 www.telia.com Corporate Reg.No.556103-4249 Registered Office: Stockholm